Mukesh Ambani’s Reliance Industries Topples TCS to Become Most Valued Company in India

Reliance Industries Ltd (RIL) has overtaken Tata Consultancy Services (TCS) to become the largest company by market capitalisation in India. At 1 PM today (July 31, 2018), the market valuation of RIL stood at Rs.7,47,644.67 crore, while the market cap for TCS stood at Rs.7,39,967.87 crore.

Let’s Run The Numbers

Bloomberg’s data reports Mukesh Ambani to now be worth $45.9 billion. This number is $1.6 billion higher in less than three weeks. RIL shares at an all-time high with an increase of 3.1 % according to BSE. This brings the share price up to Rs.1,185.85, an all-time record. TCS closed at Rs.1,941.25 per share which is 19% lower.

RIL’s current achievement comes at little surprise following the success it had in Q1 of this year. Consolidated revenue during the quarter saw an increase of 10.1 percent sequentially to Rs 1.29 lakh crore. On the operational side of this things, the EBITDA (earnings before interest, tax, depreciation and amortisation) saw an increase of 11.9 percent to Rs 20,661 crore with margin expansion of 20 basis points sequentially at 16 percent.

However, the credit mostly goes to the conglomerate’s petrochemical and refining realisations which reported a 35% year-on-year jump in volumes. Total revenue for RIL rose 56.5% to Rs.1.4 trillion compared to Rs. 90,537 crore earned for the same quarter last year. On the telecom side of things, Reliance Jio reported a total revenue of Rs.8,109 crore. This amount to a total profit of Rs.612 crore which is a 19.9% sequential rise. Profit in March quarter had stood at Rs. 520 crores.

“Reliance Jio continued to show strong subscriber momentum, in line with our expectation. However, flattish sequential ARPU despite cash back offers and changes to prime membership are surprises. Focus remains on onboarding more subscribers and driving engagement; price increase appears less of a focus for now,” said Morgan Stanley in a note to its investors.

Reliance Jio’s Future

There is no doubt the Telco arm of RIL played a significant part in achieving this huge milestone. It was reported that users consumed an average of 10.6GB data per month. An average of 744 voice calls per month were made, with total data traffic for the entire quarter across the whole network being 642 crores GB and total voice traffic standing at 44,871 crore minutes. Unsurprisingly, Videos ended up accounting for the largest draw of data with each user consuming an average of 15.4 hours’ worth of content per month.

Just recently Ambani addressed his shareholders regarding the company’s vision for what is the next step.

“Reliance is making a strategic transition to become a technology platform company. We are focused on creating multiple platforms that will accelerate our growth and create significant societal value for years to come. Our connectivity platform has already made Jio the largest mobile data network in the world. Through Jio GigaFiber we will now build the home-and-office connectivity platform, a platform that potentially connects 50 million homes. It will be as big as the mobile connectivity platform. Moreover, it will have a much higher value proposition because the core investments have been made while building the mobility network. I am confident that our growth in these consumer businesses, based on asset-light platforms of the future, will be non-linear and exponential.”

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