MUMBAI: Tata Consultancy Services, or TCS, has surpassed Reliance Industries in market cap, becoming India's most valuable company for the first time as investor worries over the Ambani firm's troubles in gas production and falling refining margins dragged down shares to a 33-month low.Reliance conceded its numero uno position on Friday after shares fell to 689. It later recovered to end at 693.10, down 2.6%."Today's event has more to do with Reliance Industries' weakness because of weak earnings expectations in the third quarter rather than TCS' strength," said Aneesh Srivastava, chief investment officer, IDBI Federal Life Insurance Reliance shares have never traded below 700 since March 20, 2009.This is the first time in more than 11 years that Reliance has ceded its top ranking to a Tata Group company after overtaking the group's entire market cap in April 2000. RIL, at that time, had a market cap of 34,342 crore, compared with 33,018 crore for all Tata companies.Reliance is expected to post a fall in earnings for the October-December quarter due to fall in gas production and weak refining margins. Macquarie Securities expects net profit to drop 21% to 4,500 crore due to an estimated 40% decline in gross refining margins to $6 per barrel. Bank of America Merrill Lynch forecast a figure of 4,650 crore with GRMs at $5.94 per barrel, and 5,140 crore with margins at $6.94."Gas production from the KG basin has reduced to 40 mmscmd and has been declining 7-8% per quarter against a normal decline rate of 7-8% per year. The sharp decline is partly due to lack of new wells being put into production and partly due to shutdown of two wells on the back of water ingress," said JM Financial analysts, in a client note.TCS shares, which fell 0.8% to Rs 1,157 on Friday, has fallen less then a percentage in 2011, compared with Reliance's 35% tumble. The Nifty, which ended the day down 0.47%, has fallen 25% for the year.TCS shares have managed to remain relatively resilient in a weak market as investors expect the company to benefit from the rupee's depreciation. Barclays Capital said in a recent report, every 1% fall in the rupee could drive up the company's margins by 30-32 basis points. The rupee has dropped almost 20% against the dollar since August."There is no doubt that TCS has been a consistently good performer and has been a good defensive bet. It is a good play on the rupee depreciation theme. But, this may not sustain in the medium term because of premium valuations and the weak global economic scenario," Srivastava said.Anand Rathi Securities Senior Vice-President AK Prabhakar said some of the heavyweights may take turns at the top position for some time. But he does not expect Reliance to regain the spot anytime soon.TCS is the third company in 2011 to challenge Reliance's status at the top. The other two - Coal India and Oil and Natural Gas Corporation (ONGC) - could not retain the top spot for long. "Reliance will take some time to catch up now because the outlook looks weak. It should correct below the Rs 600 level," said Prabhakar.If Reliance underperforms, it may weigh on the benchmark indices too because of its weightage. A higher weightage means it has a greater influence on the index. Infosys recently pipped Reliance as the most influential company on the benchmark indices before Reliance regained the top slot.