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basant
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Joined: 01/Jan/2006
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   Topic: Axis bank replaces Bharti in The EquityDesk XI
Posted: 21/Oct/2007 at 10:22pm |
This one has been a tough decision. A stock that an investor tracks from Rs 20 to Rs 970 (almost a 50 bagger) is the toughest to let go off. But over the past couple of months I have mentioned my reluctance to see big time gaisn in Bharti Airtel . The company has a market cap of more then US $ 50 billion and from here on expecting a double could mean a market cap of US $ 100 billion but is there any life after Bharti goes to US $ 100 billion? - If at all!
Any increase in EPS now will be accompanied by a decrease in the long term PE. That is because further growth will only limit the potential of the total market.So while M-Commerce and aggressive forays into under serviced areas would drive growth the best seems to be behind Bharti Airtel.
Axis Bank on the other hand is gearing up to face the new challenges in the private banking space the new name with new mandates in wealth management and AMC seems to indicate that the management means business. It has delivered a shareholder return of around 48% CAGR since its IPO excluding dividends.
Edited by basant - 26/Oct/2007 at 3:01pm
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omshivaya
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Posted: 21/Oct/2007 at 10:36pm |
Correct Decision Basant sir. Our heartiest congratulations to Axis Bank for making it to TED-XI.
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The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it
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s_praharaj
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Posted: 21/Oct/2007 at 12:15pm |
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Since yesterday, when I got the news that Reliance Communication has been given the countrywide license for GSM line, I was thinking that Bharti Air-Tel will have a tough time now. The promoter Sunil Mittal is also not investor friendly. A switch to Axis Banks seems to be a well thoughtout decission.
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Shashi Praharaj
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smartcat
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Posted: 21/Oct/2007 at 12:23pm |
Now we have 4 banking stocks and 4 media stocks in the playing eleven. Is there no room for players like Rahul Dravid or VVS Laxman?
| Any increase in EPS now will be accompanied by a decrease in the long term PE. |
| So this is not a case of being bearish on Bharti Airtel but being unable to see big multifold gains in the same compared to Axis Bank |
While I do agree that P/E will probably settle at 20 - 25 levels eventually, there is still time for that to happen (Hint: Look at chinese telecom company valuations). But I guess it will be difficult to predict when the growth levels will slacken and when the P/E will get de-rated.
For somebody who has a portfolio which is not as concentrated as TED XI, it still makes sense to buy/hold telecom companies.
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smartcat
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Posted: 21/Oct/2007 at 12:26pm |
| The promoter Sunil Mittal is also not investor friendly |
I like RCom more than Bharti Airtel, but how do you mean when you say Mittal is not investor friendly? Usually people point fingers at Junior Ambani when it comes to issues like these.
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xbox
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Posted: 21/Oct/2007 at 5:40am |
Wow Bansant jee, Seems like you are preparing yourself to actively participate in post-2009 the great Banking M&A program..... TED Bank Ltd. 
On serious note, Axis is good choice. A immediate re-rating candidate.
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gcpradhan1
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Posted: 21/Oct/2007 at 7:37am |
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Considering the current Indian Telecom Space and ever growing completion along with RelCom's country wide lecense obtain, Axis will perfectly fit into TED's XI portfolio. Let us hope this one will also make the TEDDies happy as it's predecssor did....
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Learner
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Posted: 22/Oct/2007 at 12:40pm |
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Basant sir, does it mean that TED investors like me should now gradually switch to Axis by selling Bharati, because fresh cash injection can be a constraint at this stage.
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