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Last Updated : Aug 23, 2018 03:27 PM IST | Source: Moneycontrol.com

RIL hits market capitalisation of Rs 8 lakh crore; stock touches fresh record high

The huge upmove in the stock has been visible especially after the company laid out big plans at its annual general meeting (AGM), including the launch of its fibre-to-the-home service, GigaFiber.

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Market capitalisation of Reliance Industries on Thursday touched Rs 8 lakh crore on the BSE. The stock also touched a fresh 52-week high of Rs 1,260.80.

The huge upmove in the stock has been visible especially after the company laid out big plans at its annual general meeting (AGM), including the launch of its fibre-to-the-home service, GigaFiber.

The stock surpassed m-cap of Rs 7 lakh crore on July 13, 2018. The company on July 12 crossed the $100-billion market capitalisation mark for the first time in the last 10 years. IT bellwether Tata Consultancy Services' market valuation had in May surged past Rs 7 lakh crore.

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While having a Buy rating on the stock with a target price of Rs 1,424, Vineeta Sharma, Head of Research, Narnolia Financial Advisors said with all the verticals now performing well and the capex cycle nearing the end, Reliance is expected to derive 18 percent and 12 percent plus profit growth in FY19 and FY20.

For June 2018, sales have grown by 47 percent YoY. For almost 6 years, Reliance revenues have been stagnant.

Reliance had achieved highest ever turnover of Rs 4.34 lakh crore in FY14 which the company is expected to surpass in FY19, she believes.

"Reliance EBITDA margins had fallen from 15 percent in 2010 to 7.5 percent in 2014 and are back at 14.7 percent in 2018. Similarly, net profit margin fell from 7.3 percent to 5.2 percent and is back at 9.2 percent in FY18," she said.

The Mukesh Ambani-owned company started the financial year 2018-19 with first quarter consolidated profit at Rs 9,485 crore, which grew by 0.3 percent compared to Rs 9,459 crore in the previous quarter. The year-on-year bottomline growth was 4.5 percent.

Consolidated revenue during the quarter increased 10.1 percent sequentially (up 42 percent YoY) to Rs 1.29 lakh crore. The growth was primarily on account of higher realisations of refining and petrochemical products led by 49 percent YoY increase in Brent oil price.

“RIL has completed USD 18 billion investment in Petrochemicals expansion and Petcoke Gasification plant which has already yielding result in terms of strong volume growth and margin expansion. Once petcoke gasification plant would ramp-up fully (expected by end FY19), we may see USD 2/bbl of GRM expansion. Overall, its petrochemicals profit is likely to touch to Rs 29,300 crore in FY20 compared to Rs 13,000 crore in FY17… We expect gross refining margin would remain strong in medium to long term. Further, strong growth in its retail business profits is likely to be maintained on higher consumption growth in India. Also, on Jio side, the company’s strong net subscriber addition and entry to Enterprise and Fiber-to-Home business would augment its profitability,” Sudeep Anand, Head - Institutional Equity Research at IDBI Capital told Moneycontrol.

Increased revenues also reflected higher volumes with start-up and stabilisation of petrochemicals projects, RIL said, adding robust growth in consumer businesses provided a further boost to revenues.

On the operational front, EBITDA (earnings before interest, tax, depreciation and amortisation) jumped 11.9 percent to Rs 20,661 crore with margin expansion of 20 basis points sequentially at 16 percent.

The company recently Tata Consultancy Services to become India's most valued company in terms of market capitalisation. Both the firms were competing with each other to claim the number one position in terms of market capitalisation.

In April this year, IT bellwether TCS had made history by becoming the first $100 billion IT company. RIL was the first to reach the $100 billion market cap way back in 2007.

At 13:44 hrs Reliance Industries was quoting at Rs 1,261.75, up Rs 15.25, or 1.22 percent, on the BSE. It has touched a 52-week high of Rs 1,262.95.

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First Published on Aug 23, 2018 01:46 pm
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