Reliance Regains its Position as Most Valued Company Over TCS

Reliance Industries Ltd. (RIL) has outshined IT giant software services firm Tata Consultancy Services Ltd. (TCS) as the firm with the most market capitalisation. After an increase in its share price by 3.1% on the BSE, RIL’s figure reached a whooping INR 7.51 trillion. TCS closed at INR 1,941.25 per share, 0.19% lower, which took its value to INR 7.43 trillion.

RIL’s Q1 results have been celebratory with a 17.9% increase in net profits to INR 9459 crore (USD 1.4 billion). For the quarter that ended on June 30, RIL revenue is at INR 141,699 crore (USD 20.7 billion), a 56.5% spike in comparison with INR 90,537 crore in the corresponding period of the previous year. It’s not bad news for TCS either, considering its quarterly revenues too have crossed USD 5 billion for the first time in Q1.

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Commenting on the results, Mukesh Ambani, Chairman and Managing Director of RIL said, “We continue to focus on strong delivery through operational excellence in our portfolio of businesses. Financial results of 1Q FY19 underscore the strength of the petrochemicals we have reinforced over the last investment cycle.”

RIL’s petrochemicals business generated record EBITDA with strong volumes and an upswing in polyester chain margins. Moreover, despite a few challenges, refining business performance remained steady. Higher realisations of refining and petrochemical products, led by 49% YoY increase in Brent oil price, have led to high revenue.

“Continuing strength in global demand for oil products and implementation of more stringent environmental norms for marine fuels augurs well for our refining business,” Ambani added.

Exponential growth in RIL’s consumer businesses have also pushed up revenues. Reliance Retail recorded a steep 124% spike in revenue to INR 25,890 crore and Digital Services business contributed INR 9,653 crore for the quarter.

“Our consumer businesses continue to scale new highs and now account for nearly 21% of consolidated segment EBITDA. Retail business revenues have more than doubled and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) has trebled on a Y-o-Y basis. Jio added a record number of subscribers, highlighting the compelling technology and value proposition that Jio offers vis-à-vis other networks. The scalability of our consumer business platforms is driving unprecedented value generation for our customers, our country and our shareholders,” Ambani said.

Ambani also spoke about its super successful mobile network, Jio, “Jio added a record number of subscribers, highlighting the compelling technology and value proposition that Jio offers vis-à-vis other networks. The scalability of our consumer business platforms is driving unprecedented value generation for our customers, our country and our shareholders.”

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Meanwhile, TCS has shown a 24% rise in profits, the fastest rise in two years, reaching INR 7,340 crore owing to exponential growth in banking, financial services and insurance, and its North American operations. Its revenue has ascended by 16% amounting to INR 34,261 crore.

“TCS had a strong quarter witnessing a healthy growth on back of turnaround in the BFSI segment of the North American market and the management expects the growth to sustain in the coming quarters… TCS is on track to achieve its targeted double-digit growth in FY19. Yet, we believe that at current valuations, the stock is fairly priced from a short to medium-term perspective,” Livemint quoted Indsec Securities.