Reliance Industries Ltd. (RIL) made history on Thursday, becoming number one in market capitalisation, displacing public sector giant Oil and Natural Gas Corporation (ONGC) from that position. Registering a gain of 2.3 per cent, RIL's market cap stood at Rs 1,62,971 crores ($35.5 billion) against ONGC's market cap of Rs 1,61,535 crores.
ONGC, however, is still bringing home more money with an annual profit of Rs 14,430.78 crore against RIL's Rs 9,069 crore. In revenues Indian Oil's is the highest at Rs 176,339.74 crores, but its profit is a mere Rs 1168 crores, because of the heavy losses it has faced in marketing petroleum products.
"The days are long gone when Reliance was perceived as a mere oil refining company. It is a corporate which is growing in the consumption related business like retail and real estate," said R Sreeshankar, chief investment officer of IL&FS Investmart. However, he warned against making too much of a single day's movement in stock prices.
"RIL is among the few companies that generates sufficient surplus, to be able to invest in the future business that will fuel the growth," he added. One analyst said on the condition of anonymity, “Usually, private sector companies have better valuation because of perceived better managerial efficiencies.”