Let’s turn the clock back to June 2009. That was the time RIL used to contribute a massive 16.3% to the Sensex. Since then the weight has gradually come down quarter after quarter and it has now fallen to 11.9%. Still largest, but clearly quite a dilution from almost 2 years back. Here is the data
|RIL weight in Sensex||Weight (%)|
The contenders on the other hand have been fast in climbing up the ladder. While HUL has fallen by the wayside, ITC and Infosys are giving RIL a strong run for its money. Here is the data
|RIL, ITC difference||Difference(%)|
Not just that, the combined weight of ITC and Infosys now is much higher than RIL. Not long back, RIL used to have higher weight than the other 2 combined. Here is the data
|RIL Vs ITC+Infosys||RIL Weight||Weight of ITC+Infosys|
And now, lets talk about the single most important factor for that change, the stock price performance. And just look at the following data, its startling. RIL has been a massive underperformer.
|Stock return||RIL Stock||ITC Stock||Infosys Stock|
|Since June 2009||-5%||+66%||+78%|
|Since Dec 2009||-12%||+26%||+21%|
|Since Mar 2010||-11%||+20%||+21%|
|Since June 2010||-12%||+4%||+13%|
|Since Sep 2010||-3%||-11%||+4%|
|Since Dec 2010||-9.6%||-9.3%||-8.2%|
Conclusion: Has RIL lost its mojo? Well, it remains a very important stock for the market, but it does not make or break the market any more. Its similar to what Sachin Tendulkar is to the Indian cricket team. 10 years back, he was a one man team. Today, he remains the most important member but the team does not depend on just him.
Disclaimer: The author of this article does not invest/trade in stock markets including derivatives. His only exposure to stock markets is via the stock options of TV18 and Network18 given to him by his company as part of his compensation