Mumbai, Oct. 12: Strong earnings estimates and bullish sentiments in the stock market today made Reliance Industries the most valuable company with a market capitalisation of Rs 1.63 lakh crore, toppling ONGC from the prime slot.
The Reliance scrip surged by 2.3 per cent to Rs 1,169.50 in a buoyant stock market session today with the sensex jumping 1.49 per cent.
While the BSE sensex is now 74.40 points away from a lifetime closing high, the RIL scrip is just some distance away from its life-time high of Rs 1,195 struck in early May this year.
The shares of state-run ONGC, which were trading weak in today’s session, ended the day with marginal gains of 0.35 per cent at Rs 1,132.85.
ONGC had a market capitalisation of Rs 1.61 lakh crore at the end of trading today.
While falling global crude oil prices forced the ONGC scrip to lose ground from its recent peak of Rs 1,239.15 on August 16, the RIL scrip has held relatively firm after a solid surge during August.
Infosys Technologies, India's second-largest software exporter, ascended to the third position on Wednesday after it reported strong quarterly earnings, beating forecasts. It registered a market-cap of Rs 1.12 lakh crore today.
Infosys is followed by state-run NTPC at Rs 1.07 lakh crore. TCS ranks fifth with a market-cap of Rs 1.06 lakh crore.
Recently, many brokerage houses had raised the earnings estimates for Reliance Industries.
“The scrip is a clear buy. Despite weaker refinery margins, the overall margins will improve due to sharp increase in petrochemicals margins. The stock also has embedded value in terms of its retail plans,” said Manish Sonthalia, vice-president-equity strategy, Motilal Oswal Securities.
The brokerage house expects a topline growth of 28.1 per cent, an EBIDTA increase of 19.5 per cent and a net profit growth of 3.4 per cent for the company in the second quarter results that are due on October 19.
JM Morgan Stanley had raised the Reliance Industries scrip by 10.1 per cent and 5.2 per cent for fiscal 2007 and 2008 respectively, factoring in higher petrochemical prices and refining margins partly aided by a weaker rupee against the dollar.
“We maintain our overweight rating on the stock and lift our price target to Rs 1,345, implying 14 per cent upside potential from current levels,” says their recent report.
Led by rally in Reliance and fresh demand for other blue chip stocks in expectation of robust second quarter results coupled with falling global crude oil price, the market pushed up sharply in today’s trading session.
“While fresh pricing was expected in the markets, the sharp rally came as a surprise. Most of the market participants, including the technical analysts, were in a bearish mood at the beginning of the session,” said Sonthalia.
The 30-share BSE sensex jumped 184.49 points to settle at 12,537.98, its highest closing in five months since May 10, 2006. On the day, it had closed at a lifetime high of 12612.38.