Reliance Industries just beat Tata Consultancy Services to become India’s highest-valued company

• Reliance Industries boasts a market capitalisation of ₹7.46 trillion while Tata Consultancy Services’ market cap has fallen to ₹7.39 trillion.
• Investors have been flocking to Reliance Industries after the conglomerate posted its largest-ever quarterly profit - ₹94.6 billion - on 27 July.
• However, TCS did beat Reliance Industries in the race to a $100 billion market capitalisation earlier this year.

Not only does India’s richest man, Mukesh Ambani, have the world’s most expensive private residence, his company is now India’s highest valued.

Investors have been flocking to Reliance Industries after the conglomerate posted its largest-ever quarterly profit of ₹94.6 billion, a 18% jump from the previous year, for the three months ending on 27 July. Its revenue grew by 10% to ₹1.42 trillion owing to higher sales of refining and petrochemical products.

The resultant buying frenzy has led to a surge in Reliance’s share price from ₹1,116 to ₹1,180 as of this afternoon, thereby helping the Mukesh Ambani-led conglomerate overtake Tata Consultancy Services (TCS) the country’s largest software services exporter, as India’s largest company by market value.

At the time of filing this piece, Reliance Industries boasts a market capitalisation of ₹7.46 trillion ($108.8 billion). Meanwhile, TCS’ market cap has fallen to ₹7.39 trillion after a poor week at the stock market, which saw its share price fall from ₹2,005 on 23 July to the current level of ₹1,944.

The stock of the IT consultancy firm, which is owned by the Tata Group, has often been said to be overvalued based on years of single-digit revenue growth. It did, however, report a strong Q1 result on 10 July, with its operating profit up by 24%. However, the resulting growth in its share price was short-lived amid a wider selloff in the stocks of large IT companies.

TCS first to $100 billion

TCS, however, did beat Reliance Industries in the race to a $100 billion market capitalisation earlier this year. On 23 April, TCS crossed the $100 billion mark - a feat that Reliance Industries was able accomplish only earlier this month, on 12 July.

This fact makes Reliance’s surging market capitalisation all the more impressive. Its share price is up by nearly 28% since the beginning of the year, as it continues to expand in the retail and mobile segments.

However, it’s worth mentioning that Reliance crossed $100 billion in terms of market cap way back in 2007, making it India’s largest company at the time. However, the rupee was trading at around 40 to the dollar around then.

Coming back to the present, both Reliance Industries and TCS are far ahead of India’s third largest company by market capitalisation, HDFC Bank, which has a valuation of ₹5.74 trillion. It seems that the race to the top will feature just both of them for a while.