RIL becomes first Indian firm to hit ₹9 tn m-cap
RIL’s shares rose 2.28% to a record ₹1,428 in intraday trade on BSE
The Mukesh Ambaniled Reliance Industries Ltd (RIL) has become the first Indian company to hit the ₹9-lakh crore (trillion) market capitalization mark after its shares rose nearly 2% to ₹1,423 on Friday.
However, at close of trade, the company’s market capitalisation settled at ₹8.97 lakh crore.
Shares of the country’s most valued company rose by 1.37% to close at ₹1,415.30 ahead of its earnings announcement. During the day, it spurted 2.28% to a record ₹1,428.
The shares have surged nearly 26% since January.
India’s benchmark Sensex Index rose 0.6% or 246.32 points to hit 39,298.38 points.
The company is expected to report strong earnings in the September quarter on the back of recovery in refining margins, which is likely to offset weakness in petrochemicals retail and telecom operations.
Ten of the 14 analysts polled by Bloomberg expect RIL’s consolidated net profit to be ₹11,256 crore. Nine analysts estimate the company’s revenue at ₹1.51 trillion.
“Strong refining will drive a quarter-on-quarter (q-o-q) rise in Reliance’s standalone profit after tax (PAT). Reliance Jio Infocomm Ltd’s average revenue per user (Arpu) may see a small cut but healthy subscriber additions may still allow q-o-q profit growth. Reliance Retail’s strong growth should continue,” said CLSA in a report to its investors.
Reliance Jio was the only net gainer adding 8.46 milion subscribers in August, while other telecom operators including Bharti Airtel and Vodafone Idea were on the losing side, a report by the Telecom Regulatory Authority of India showed on Friday.
According to Bank of America Merrill Lynch RIL can become the first Indian company to achieve a market capitalization of $200 billion in the next two years. The foreign fund and advisory firm has reiterated its buy rating on RIL with a price target of ₹1,615.
The brokerage firm assumes that the market capitalization to rise over $200 billion on three informational drivers—new commerce venture, fixed broadband operations and digital initiatives—could add $55 billion enterprise value for the company.
The brokerage firm also assumes that its digital initiatives like advertising, lending along with SME/broadband may add $22 billion incremental value.
“RIL targets 10 million Kiranas by FY22; SME enterprise/ broadband base of 9 million/7 million base by FY22 and EBITDA margins of 50%/40%; We estimate Jio’s Arpu would increase to ₹177 in FY22 from ₹122 (in 1Q20) and estimate better than expected IMO impact leading to GRMs of $13 in FY21”, the brokerage firm added.
Tata Consultancy Services Ltd is the second most valuable company after RIL with a m-cap of ₹7.71 lakh crore.
SHARES OF RIL ROSE BY 1.37% TO CLOSE AT ₹1,415.30. THE SHARES HAVE SURGED NEARLY 26% SINCE JANUARY