Reliance Industries again pipped Tata Consultancy Services on Friday in terms of market capitalisation intraday as the former’s stock jumped as much as 3.7 per cent while the latter lost around 1.1 per cent.

However, the rise and fall of both the stocks got corrected on closing. As a result, RIL and TCS are almost equally valued now at ₹4.55 lakh crore with a difference of ₹300 crore between the two (TCS higher than RIL), according to figures provided by the BSE. On Tuesday, the same happened, but the RIL stock witnessed profit-booking and hence the gap in market cap got widened as RIL’s shares could not sustain the rise.

According to data provided by the companies to the BSE on Friday, foreign institutional investors have been neutral on TCS in the March quarter compared to the December quarter as their shareholding has remained almost unchanged at 16.9 per cent, while they increased their exposure in RIL by 71 bps to 22.58 per cent.

MFs raise stake in RIL

Mutual funds too marginally raised their stakes in RIL by 12 basis points to 2.82 per cent while they cut their stake in TCS by 15 bps to 0.94 per cent. Insurance companies, led by LIC, reduced their exposure in RIL by 76 bps to 8.95 per cent while they sought value-buying opportunity in TCS and bought 13 bps more into the company. While LIC increased its stake in TCS by 21 bps, it pared its holding in RIL by 69 bps.

RIL or TCS?

The TCS stock is witnessing support despite macro challenges, partly due to the attractive buyback offer price of ₹2,850 a share, a premium of about 23 per cent to Friday’s closing price of ₹2,311.20.

Though its performance in the March quarter was not as disappointing as that of Infosys, analysts prefer to adopt a cautious approach with slight optimism based on the management’s hopeful comments about its outlook for FY18.

Rupee appreciation and many countries led by the US trying to protect local jobs also remain key risks for information technology companies including TCS.

On the other hand, analysts continue to remain positive on RIL despite a 30 per cent year-to-date jump in its stock price. The RIL stock is 16 per cent away from its all-time high level of ₹1,626.05 hit on January 15, 2008.

Edelweiss, in its report dated April 20, has estimated a target price of ₹1,600 on the stock after the company announced the status of its projects in the refining and petrochemicals business.

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