By Rakteem Katakey
Aug. 18 (Bloomberg) — Billionaire Mukesh Ambani’s Reliance Industries Ltd. was toppled as India’s most valuable company for the first time in four years by Coal India Ltd. as demand for the fuel attracted investors.
Coal India, the world’s biggest producer of the fuel, rose 2.8 percent to 397.90 rupees at the close in Mumbai yesterday, valuing the company at $55.35 billion. Reliance, which declined for the ninth day in the past 10, fell 0.6 percent to 755 rupees, giving it a market capitalization of $54.45 billion.
The state-owned miner has surged 26 percent this year on demand for coal Fake swiss watches, used to generate more than half the country’s electricity. Reliance has slumped 29 percent Franck Muller Replica, the most since 2008, as declining natural gas production curbed profit growth. The key Sensitive Index has fallen 18 percent this year.
“Coal will continue to be the most widely used fuel for energy generation for a long time,” Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd., said by phone from the southern city of Kochi. “As long as that continues and as long as India is growing, there’s no stopping the Coal India story.”
Coal accounted for 53 percent of India’s fuel consumption in 2010, while oil and gas had a combined share of 40 percent Submariner watches, according to the BP Statistical Review of World Energy.
The world’s third-biggest coal consumer may more than triple its use in the next two decades to 2 billion metric tons, according to Coal Minister Sriprakash Jaiswal. India produces 530 million tons of coal a year and imports about 67 million tons, he said.
Coal Reserves
Coal India had proven resources of 52.55 billion tons, of which 21.75 billion was extractable as of April 1, 2010, according to the company’s website.
“There are no compelling reasons to buy Reliance,” said Kamlesh Kotak, the Mumbai-based vice-president of research at Asian Markets Securities Pvt. “Coal India, though, will always have demand for its produce. Its underlying reserves are huge.”
The federal government raised 152 billion rupees ($3.3 billion) selling Coal India shares at 245 rupees each in October in the country’s biggest initial public offering. The miner increased coal prices in February and was included in the key Tissot Replica, 30-member Sensitive Index starting Aug. 8.
The Kolkata-based producer of more than 80 percent of India’s coal reported a 63 percent increase in profit in the three months ended June 30 to 41.4 billion rupees. Annual profit may rise about 10 percent if the sales target of 454 million tons for this financial year is achieved Louis Vuitton Replica, according to Chairman Nirmal Chandra Jha.
Reliance Refining
Coal India’s net income may climb 39 percent to 150.7 billion rupees in the year ending March 31, according to the average estimate of 34 analysts surveyed by Bloomberg.
Gains from crude oil refining helped to boost Reliance’s net income in the quarter ended June 30 to the highest since the three months ended December 2007. Quarterly profit may have peaked, unless gas output rises, because refining margins may remain at the current level or fall, according to Prashant Kamdar, an analyst with Guiness Securities Ltd. in Kolkata.
Profit at Reliance, which owns the world’s largest oil refining complex, may rise 18 percent to 227.7 billion rupees in this fiscal year, according to the mean estimate of 26 analysts.
Output from Reliance’s KG-D6 block, India’s biggest gas deposit, declined 18 percent in the quarter ended June 30 from a year earlier to 156.2 billion cubic feet, the company said July 25, without providing a reason.
Reliance is seeking BP Plc’s expertise in deepwater drilling to boost gas production after agreeing in February to sell a 30 percent stake in some of its fields to the London- based company for $7.2 billion.
Reliance surpassed state-run Oil & Natural Gas Corp. as India’s biggest company by market value in February 2007.
–With assistance from Manish Modi in New Delhi. Editors: John Chacko, Abhay Singh
To contact the reporter on this story: Rakteem Katakey in New Delhi at rkatakey@bloomberg.net
To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net
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