Reliance topples IOC to become the biggest Indian company

RIL was the most profitable company in the country with a net profit of more than double that of IOC in FY2019

In a recent market shift, Mukesh Ambani’s oil-to-telecom conglomerate Reliance Industries  toppled state-owned Indian Oil Corp (IOC) to become the India’s biggest company by revenue. Reliance in the fiscal year that ended 31 March, reported a turnover of ₹6.23 lakh crore. In comparison, IOC posted a turnover of ₹6.17 lakh crore for the fiscal, according to latest regulatory filings.

Reliance Industries was also the most profitable company in the country with a net profit of more than double that of IOC in FY2019 – riding on the tide of its new businesses and oil operations.

Reliance Industries’ growth has been tremendous since the last decade as its bet on burgeoning consumer base – through Jio and its foray into new businesses such as telecom, retail, and digital services vastly expanded the company revenue and business – netting the company a net profit of ₹39,588 crore in FY19.

IOC till last year was the most profitable PSU but may have lost this position to Oil and Natural Gas Corp (ONGC) in 2018-19. ONGC is yet to declare its FY19 earnings but it had clocked a net profit of ₹22,671 crore in the first nine months of the fiscal year.

Net profit of IOC, which depends on oil refining, petrochemicals and gas business for its revenue, had in 2018-19 declined by 23.6% over ₹22,189.45 crore net profit it had earned in 2017-18.

The shift might also seem plausible considering the vast-industry presence of Reliance in comparison to ONGC and IOC’s singular industry operations.

With this milestone, Reliance has achieved the numero uno position in terms of all three parameters — revenue, profit, and market capitalisation, beating PSU’s for the first time.

With strong refining margin and robust retail business, Reliance clocked a 44% in revenue in FY19 over the previous year and posted a compounded annual growth rate of over 14% between FY10 and FY19. In contrast, IOC turnover rose 20% in FY19 and 6.3% during FY10 and FY19.

At Tuesday’s trading price of ₹1,345, Reliance boasts of a market cap of ₹8.52 lakh crore.

Interestingly, Reliance which boasts of the highest cash reserves of ₹1.33 lakh crore on the book, also has the highest gross debt of ₹2.87 lakh crore at the end of March 2019.