Reliance May Be Dethroned As India's Largest Listed Firm Soon

India's largest listed company, Reliance Industries Ltd. has fallen over 23% from its highest point which it reached in July this year. In fact, if the stock fails to climb 5% over the five remaining trading sessions in this calendar year, it will not only record its longest monthly losing streak since the Covid-19 markets' slump, but also snap what could have been its tenth consecutive calendar year of delivering positive returns.

In the meanwhile, India's largest IT company, Tata Consultancy Ltd., as well as the country's largest bank by market capitalisation, HDFC Bank Ltd. are quickly catching up to dethrone the conglomerate from its top spot.

Earlier this year, HDFC Bank finally crossed Rs 1,750 per share — a level the stock had tested, yet failed to surpassed for nearly three years, and is now set to deliver its 11th consecutive year of gains.

Tech giant TCS also rose over 10% during the year, and it is the closest to dethroning RIL's from its top spot than it has been in years.

While IT companies are observing renewed optimism led by macro-economic events such as a global rate easing cycle — with the US Fed cutting policy rates being key among them, HDFC Bank is set to benefit from its mega-merger with Housing Development and Finance Corporation.

On the other hand, Reliance Industries has seen consensus estimates fall for its earnings projected over a blended-forward-twelve-month basis as shown in the chart below.

The earnings per share estimates for the conglomerate over next year have dropped 16% since the start of the current fiscal year.

Even as analysts factor in lower earnings projections for the company, the consensus price target still implies an upside of over 30%, which is the most bullish they've been on the stock in nearly five years.