Reliance Adds Record $19 Billion in Market Value on Profit Beat

(Bloomberg) -- Reliance Industries Ltd. shares surged almost 12%, adding more than $19 billion in market value in a record single-day gain for an Indian company, after quarterly profit surpassed expectations.

The rally, the steepest since April 2020, came alongside another milestone for the oil-to-telecom giant: for the first time in nearly a decade, no analyst recommends selling the stock.

Avendus Spark, the only brokerage with a sell-equivalent rating on India's most valuable company, raised the stock to add from reduce following the conglomerate's blowout earnings. The move by analyst Arun Prasath leaves the billionaire Mukesh Ambani-led company with 32 buy calls and no hold or sell recommendations — a first since 2017, according to data compiled by Bloomberg. Prasath's upgrade comes after he maintained a sell-equivalent rating for most of the past four years.

The bullish turn marks a sharp reversal in sentiment toward the index heavyweight after months of concern over earnings momentum across its businesses, including retail. The stock had fallen more than 20% this year before Monday, pushing its valuation toward multi-year lows. Avendus said the slide implied a holding-company discount of about 80% on Reliance's stake in the newly listed Jio Platforms Ltd., a level it expects to narrow.

"Such a high holding company discount is unreasonable for a mega-cap and should converge toward 25%-30% over time," Prasath, among the top-rated analysts for Reliance, wrote in a note dated Nov. 2. He has a 12-month target of 1,280 rupees.

The stock jumped almost 12% to 1,300 rupees at the close, after Friday's earnings beat revived optimism over the company's growth.

Net income surged more than 40% to 255.5 billion rupees ($2.7 billion) in the September quarter, beating the 213.67 billion-rupee average of analyst estimates compiled by Bloomberg. The results were helped by diesel refining margins near historic highs amid tight global supplies and disruptions from the Middle East war.

Jio Platforms, in which Reliance owns 64.5%, also posted a 14% rise in profit. The company's listing last week — the largest-ever for an Indian company — helped propel billionaire Ambani's Reliance Group past the Tata Group to become India's most valuable business empire.