At $131.63 bn, RIL overtakes BP Plc in market capitalisation

KS Badri Narayanan Chennai | Updated on October 30, 2019

The two stocks are not strictly comparable, as Reliance is a more diversified player, while BP remains a pure-play energy company.

Reliance Industries on Wednesday overtook BP Plc in terms of market capitalisation. RIL's market-cap currently stands at $131.635 billion against BP's $129.9 billion. While RIL's market-cap has climbed from $80.245 billion at the end of 2018, BP's has only moved up marginally from $127.054 billion.

The share price of Mukesh Ambani-controlled Reliance Industries hit a year-high of ₹1,480 on the NSE on Wednesday and is hovering around ₹1,471.90. In early trade on the London Stock Exchange, the BP stock climbed 0.69 per cent to £495.95.

It must, however, be noted that the two stocks are not strictly comparable, as Reliance is a more diversified player with retail and telecom verticals, while BP remains a pure-play energy company.

For the quarter ended September 30, 2019, RIL clocked revenues of ₹163,854 crore ($23.1 billion), an increase of 4.8 per cent compared to ₹156,291 crore in the corresponding period of the previous year. The increase in revenue was primarily due to the robust growth in the retail and digital services businesses. The two segments, which grew 27 per cent and 43 per cent, respectively, offset the drop in refining and petrochemicals segment revenues post the 17.7 per cent fall in Brent crude price.

Read also: RIL Q2 profit up 18.3% at ₹11,262 crore

BP posted a sharp drop in third-quarter profit, according to numbers released on October 29. Its net income slumped 40 per cent from a year ago to $2.3 billion. Excluding the $2.6 billion raised from the sale of some assets would push BP into its first quarterly loss since 2016.

In contrast, Reliance Industries has been going from strength to strength. Earlier this year, it re-entered the elite club of Top-100 market cap companies after a decade. Tata Consultancy Services, for the first time, entered the club.

"India rejoined the Global Top 100 market-cap club for the first time since 2009, with the return of Reliance Industries, as well as a new entry, Tata Consultancy Services. Both companies’ market capitalisation increased due to robust earnings growth coupled with the overall strong domestic market performance," PwC said in a study after compiling the data for the period ended March 31, 2019.

After RIL's Q2 performance, Kotak Securities said the results were broadly in line with its expectations as higher Jio/retail contribution and other income mitigated the weakness in the downstream oil business. "Effective net debt has now peaked with rising cash profits covering for declining capex. Near-term refining strength amid IMO (International Maritime Organization) implementation, progress on deleveraging roadmap and accelerated the rollout of (Fibre to the home) FTTH/new commerce may augur well. We reiterate BUY rating on the stock with a revised FV of ₹1,550 (₹1,425 earlier)," it added.

Published on October 30, 2019

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