RIL becomes India's first to surpass Rs 20 lakh crore in market capitalization, The stock surged 10.4 percent in January and continued to climb nearly 4 percent in February. These recent gains are consistent with the overall market rally and positive reports on the company from multiple brokerages.

Shares of Mukesh Ambani-backed Reliance Industries Ltd on February 13 became India's first company to surpass Rs 20 lakh crore in market capitalization after its shares rallied over 14 percent so far in 2024.

The stock hit a fresh record high of Rs 2,957 on the BSE and gained as much as 1.8 percent intraday on February 13. At 11.16 am, the stock was trading at Rs 2,953, up 1.7 percent from its previous close.

The conglomerate reached Rs 1 lakh crore in market cap in August 2005, Rs 2 lakh crore in April 2007, Rs 3 lakh crore in September 2007, and Rs 4 lakh crore in October 2007. And, since then, it took 12 years to reach Rs 5 lakh crore in July 2017, while the market value reached Rs 10 lakh crore in November 2019, and Rs 15 lakh crore in September 2021. The Rs 20-lakh-crore milestone was achieved in over 600 days.

The stock surged 10.4 percent in January and continued to climb nearly 4 percent in February. These recent gains are consistent with the overall market rally and positive reports on the company from multiple brokerages.

Analysts acknowledge the theoretical benefits of higher oil prices for RIL's oil-to-chemicals (O2C) businesses but express concerns about potential disruptions, including increased logistics costs and shipping times. The overall impact is uncertain. Despite rising oil prices, oil marketing stocks haven't declined as expected. Potential listings for retail or telecom are anticipated, but no recent developments have been reported.

Brokerage Bernstein anticipates a robust 20 percent CAGR in EPS growth until the end of FY26, driven by retail and telecom sectors. The telecom focus will shift to monetization after the 5G rollout, with a 15 percent CAGR revenue growth expected for Jio in the next three years.

Jio's market share is projected to reach 47 percent by FY25, fuelled by 500 million subscribers and an over 11 percent tariff hike in FY25. Retail is on a strong growth trajectory, showing a 24 percent on-year increase, sustainable through store expansion and increased e-commerce. The company's oil-to-chemical earnings may remain flat on stagnant volume growth and marginal improvements in chemicals. E&P volumes are expected to peak in the next 12 months, with future growth driven by solar and battery capacity expansion, the Bernstein report added.

Analysts said investors can expect key catalysts, including spin-offs after the India election, higher telecom tariff rates, announcements in the new energy sector, and improved free cash flow post-5G infrastructure build-out.

Several analysts are optimistic about the stock due to RIL's positive stance on controlled spending and robust retail performance in Q3 earnings. The 22 percent on-quarter drop in Q3 capital expenditure to Rs 30,100 crore is attributed to decreased spending by Jio after the 5G rollout and limited retail expansion. The capex slowdown, as 5G deployment nears completion, is viewed positively by analysts. Despite a slight increase in net debt, the reduced capex and improved EBITDA run rate suggest favorable free cash flow expectations for the next two years.