Reliance Industries logs fresh all-time high, hits Rs 9.5 trillion m-cap

Reliance Industries (RIL) today became the first Indian company to cross the market capitalisation of Rs 9.50 trillion after the company's stock rallied over 3 per cent intra-day to hit a fresh all-time high of Rs 1,508.45 on the BSE.

RIL jumped 3.3 per cent to Rs 1,508.45, surpassing its previous high of Rs 1,490 touched on October 31, 2019 in intra-day trade. At 12:39 pm, the Mukesh Ambani-led RIL had the market-cap of Rs 9.54 trillion, BSE data shows.

On October 18, RIL had become the first company to cross the market-cap of Rs 9 trillion. Thus far in the calendar year 2019 (CY19), the stock price of RIL has rallied 34 per cent, as compared to 12 per cent rise in the S&P BSE Sensex. The company’s market-cap has surged by Rs 2.3 trillion thus far in CY19.

Shares of other telecom services providers Vodafone Idea and Bharti Airtel too rallied today after they decided to raise tariffs starting next month, the first increase since the entry of RIL’s telecom subsidiary Reliance Jio Infocomm.

“The acute financial stress in the telecom sector has been acknowledged by all stakeholders and a high level Committee of Secretaries (CoS) headed by the Cabinet Secretary is looking into providing appropriate relief,” Vodafone Idea said in a statement.

Mobile data charges in India are by far the cheapest in the world even as the demand for mobile data services continues to grow rapidly. To ensure that its customers continue to enjoy world class digital experiences, Vodafone Idea will suitably increase the prices of its tariffs effective 1 December 2019, it added.

Analysts at JP Morgan see limited telecom tariff hikes by RIL until Jio hits around 50 crore subscribers (which is at least one year away). Given the IUC pass-through, Jio margins should further expand from here. Over the next six months, the key stock price drivers we see are completion of the Saudi Aramco investment and the structure, and further increase in tariffs, the brokerage firm said recent report. The stock however, trading above price target of Rs 1,400 per share.