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RIL can hit Rs 11 lakh crore market cap over the next year, says Probal Sen of Centrum Broking

Updated : November 28, 2019 01:21 PM IST

Sen highlighted the company’s efforts of huge capital investment being made across businesses

The robust capex is now being monetised over the last 12-15 months and is delivering in terms of profitability in operating earnings, Sen said.

The market capitalisation of oil to telecom major Reliance Industries Ltd. (RIL) can reach above Rs 11 lakh crore next year, says Probal Sen, senior vice president of Centrum Broking.

RIL, on Thursday, hit a market cap of Rs 10 lakh crore, to become the most valued Indian company in terms of market capitalisation.

RIL shares rose as much as 0.7 percent intraday today to touch a new 52-week high of Rs 1,581.25 per share on the BSE, pushing the company's market cap to over Rs 10 lakh crore. The stock has risen 39 percent in the last 1 year and 40 percent just in 2019.

Probal Sen highlighted the company’s efforts of huge capital investment being made across businesses.

The robust capex is now being monetised over the last 12-15 months and is delivering in terms of profitability in operating earnings, Sen added.

"One expects that the momentum will only increase going forward now with the capex cycle having getting wound down and the earnings momentum from across the businesses starting to pick up specifically of course on the consumer business which continues to beat estimates pretty much every quarter," Sen said.

"If you look across the Sensex estimates in terms of what their fair value of the stock is then inclined marketcap would be probably between Rs 10.5 trillion and Rs 11.5 trillion. So in that sense assuming that they meet those estimates then you are looking at the stock hitting Rs 11 lakh crore sometime over the next year," he added.

On the financial performance of the company, Sen said that the business continues to remain in a ‘very healthy’ shape and hoped it will get even stronger assuming that telecom and retail continue to perform well.

"The fact that RIL continues to deliver top quartile performance in terms of overall profitability is extremely credible because refining margins are not at their strongest right now," Sen added.

At 12:45 pm, RIL's stock price was trading 0.37 percent higher at Rs 1,575.50 on the Bombay Stock Exchange.

RIL can hit Rs 11 lakh crore market cap over the next year, says Probal Sen of Centrum Broking

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