Lonely at the top! What powered RIL’s trail-blazing journey in last 30 years

As the RIL stock scaled a new landmark of Rs 10,00,000 crore in market-cap on Thursday, it marked a whopping 60,000 per cent growth in market value of the energy-to-telecom conglomerate over the past 30 years. And the most striking force that has helped India’s biggest business house to grow so rapidly has been its willingness and ability to change with times.

In the last three decades, the business behemoth has evolved from a yarn manufacturer to an energy giant and quickly adapted to a changing consumer environment by putting in big money to become leaders in the digital and retail segments.

Investors have reposed immense trust in the company’s vision and backed it constantly, helping the valuation climb 60,742 per cent since January 1991. RIL’s share price has grown over 14,200 per cent during this period.

The company added many feathers to its cap through these years. From being the first Indian private company to be rated by S&P and Moody’s to become the first company to report more than Rs 10,000 crore in quarterly net profit in 2019 and attaining the numero uno position of Rs 10,00,000 crore market-cap, the company has crossed many milestones during this journey.

While RIL managed to grow its market capitalisation by over 600 times between January 2, 1991 and November 29, 2019, some other leading market-cap gainers like L&T, Ashok Leyland, Tata Steel, CEAT Talbros Automotive Component, Federal-Mogul Sagar Cement and International Paper APPM have grown theirs between 15 times and 205 times during this period.


RIL has managed to report yearly growth in profit ever since 2009. Its bottom line has growth from Rs 15,278 crore in FY09 to Rs 39,734 crore in FY19, recording an annualised growth rate of over 10 per cent.

Much of the company’s growth has been funded with debt, which has often emerged to give investors a worry. Its consolidated debt has grown 277 per cent to Rs 2.87 lakh crore as of March 31, 2019 from Rs 72,256 crore in FY09. The company has pledged to pare it and become a zero-debt company by March 2021.

Global as well as domestic brokerages are bullish on the RIL, despite the heavy debt on balance sheet and the stock having already recorded a 40 per cent rally on a year-to-date basis. HSBC recently came out with a ‘Buy’ rating on the oil-to-telecom conglomerate with a price target of Rs 1,700. It called the stock valuation ‘inexpensive’.

Brokerage Centrum has a price target of Rs 1,625 on the stock. “We retain out ‘Buy’ rating as the company moves to monetise the massive investments made in the digital business,” the brokerage said in a report on October 29.

Mustafa Nadeem, CEO, Epic Research said two important factors should be seen as a catalyst for the rally in RIL shares. “First, Reliance Jio has seen a stellar growth, raising its market share to over 30 per cent. And secondly, its stake sale to Aramco has further made its valuation attractive, since its aim to have a debt-free balance sheet in FY20-21,” he said.

Sanjiv Bhasin, Executive VP, IIFL Securities said, “We are looking Nifty at 14,000 by next Diwali and RIL will drive the market going forward. We see the m-cap of the company at around Rs 12 lakh crore during the next 12 months. The focus of the company has shifted from energy to technology and retail-oriented firm. Jio will see re-rating.”