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Wow! A Full House NSE Training Fundamental Workshop !

Wow! A Full House NSE Training Fundamental Workshop yesterday !

Seems to get bigger & better every time !

Did the first one on August 8,2015 and had blogged on it  as linked below

Interesting Interaction at the NSE Equity Fundamental Training Workshop

Sunday, August 16th, 2015

Did this one too on “Interpretation of Financial Statements for Stock Analysis” under NSE’s Rapid Series at their NSE BKC Complex

@ 30 Participants,both genders aged 22 to 58 from leading Broking Firms,Corporates,Banks and even Individuals who had come on dot and stayed till 8 pm ! expecting to learn how to read financial statements and  market dynamics to assess risks and opportunities in Indian Equities

Common Question right from Manish Shah,who introduced himself  to me in the lift going up to the Class ” How are the Markets Looking “? ~ “Where will the Sensex & Nifty head in the short term”?

Had taken a Bull along ! really !…a smaller version of the Wall Street one….told the class I love four animals…Elephants (Lord Ganesha),Lions (My Zodiac Sign),Tortoise(Good Luck & of course Bulls (I’m always one!)….and you’ll always find them on my office desk !…in fact four bulls of various sizes !…and clients know my market view on simply seeing how the bulls are placed !…if facing them straight up  (↑)  as they sit across me,I’m very bullish…if slanted ( ⁄ )towards them,I’m bullish…slant inclination reveals how much !….if a horizontal view (↔ ) then indicates market will remain flat to rangebound and if the bulls face me vertically (↓ ) I’m bearish !….and slant facing me shows intensity of being bearish !

That got a few knowing laughs from the participants and set off the mood for the Workshop with humour being interspersed right through

Interacted on the Sensex Dynamics right from base year 1978 and in the last 20 years from November 1,1995 to October 30,2015 when despite nearly half of the @ 4850 trading days saw the Sensex close negatively the Sensex ran up over 650% !…but is that enough!…..the Opportunities & Threats that were clearly visible during the years right from 1991 when Modern Reforms set in to 2001 when Markets had bottomed  out on the ICE Age Melting to the Sharp drop in Interest rates from 14% to 7% in and around 2004 to post Lehman 2008 levels of 8000 in October 2008 and March 2009….showed them from current Sensex of 26657 how to assess fundamentally where we could be heading and the risks associated….discussed Passive Index Investing vs Active Investing and therefore the need for Fundamental Analysis and therefore the need to Interpret Financials & therefore the need to assess Value vs Price  & therefore this Workshop  ! read more

Sterlite Tech upwardly mobile @ Rs 104+ on the Digital India & Demerging Power Story

Sterlite Tech closed strongly upwardly mobile @ Rs 104+

It clearly continues to benefit from Government’s scaling up the National Optical Fiber Network (NOFN) Initiative and the ‘Digital India’ Story unfolding

However an interesting development announced in May was the demerging of it’s capital intensive and yet to contribute to profits Power Segment

The Power Segment is being demerged as of April 15,2015 into a separate company Sterlite Power Transmission Ltd which will remain unlisted

Each Shareholder will get an option to remain invested also in the Power Co or exit it.For every 5 shares held in Sterlite Tech,the Shareholder will get the options of 1 share valued at Rs 112.30 (FV Rs 2) or 1 redeemable preference share for the same value which will be redeemed within 30 days.

The demerged entity will be worth Rs 885 crs after considering debt allocation.This would compute to a Value of Rs 22.46 per Share of Sterlite Tech

Chairman Anil Agarwal states that Sterlite Technologies is at a unique inflection point

When I did the Segment Analysis ,observed that while the FY 15 Topline of @ Rs 3000 crs is more or less evenly split between Telecom & Power,76% of the Segment EBITA of Rs 327 crs comes from Telecom (Rs 249 crs)

Importantly after the demerger of the Power Segnent ,Sterlite Tech will retain just Rs 674 crs  consolidated net debt from the pre-re-structuring consolidated net debt of Rs 4881 crs

With Equity at Rs 79 crs (FV Rs 2) and with the capacity expansion plans one should expect surge in profitability which was being dragged down in the near term by the Power Segment …EBITA over Rs 300 crs for the Telecom Business in FY 16 is on the cards

There is an enabling resolution proposed for Borrowings up to Rs 1000 crs

At Rs 104,the ex demerger price works out to under Rs 82 if opting for exiting the Power business though there’s a few months to go before the demerger is effected

My sense is that whenever the record date is announced in FY 16 for the demerger  and trading switches to an ex demerger  basis just a few days prior,the ex demerger share price will quickly climb back to the cum demerger share price

Though I have had serious reservations on Corporate Governance issues with the Vedanta Group  whenever they have restructured through merging group entitities ,I quite agree with the Chairman,Anil Agarwal that Sterlite Technologies is at an inflection point …and ironically it involves not a merger but a demerger situation ! read more

Reliance or NBCC ? ~ Both @ Rs 850 levels

😀 Oh ! How I love Equities !

Reliance Industries or NBCC !?

No Brainer!?

Both  FV Rs 10 and @ Rs 850 levels

Reliance with a Market Cap of @ Rs 275000 crs and  embedded in controversies and has actually lost monies for shareholders in the last six years of holding

NBCC with a Market Cap of  @ Rs 10200 crs and on the ascend yet despite a stellar over 500% rise in just over a year !

Had Recommended Exit from Reliance over a year ago on Corporate Governance issues and had strongly recommended NBCC as a SS 2 Select on October 18,2013 as a super Diwali Pick at Rs 110

If you Guys consider a Switch from Reliance to NBCC and make some Money on this,let me know by email and I’ll tell you where to send my Fees ! 🙂

If you don’t make Monies then my email was wrong! 🙂

Oh! and if you’re considering switching from NBCC to Reliance in expectations of  ‘Jio’ Rollout benefit,then all the best and “Jugh Jugh Jio! ” 🙂

 

Reliance Penalised Again for KG Gas Underproduction ~ Pyrrhic Government Victory

At the outset let me state I’m neither a hater nor baiter of Reliance Industries and it’s Ambani Family Promoters…on the contrary   had applauded the late Founder Dhirubhai Ambani for his guts and gumption to create the Reliance Group in adverse,hostile and a monopolistic scenario where he broke down several barriers of entry to  enrich millions of shareholders along with him right from 1970s and arguably making him the Father of the Equity Cult in India  ….even today Reliance Industries has nearly Three Million Shareholders who keep the faith

However the debate is yet out whether Means justify the End or the End justifies the Means !

The near Three Million Shareholders must be aware of the Risks associated with a Reliance Investment….look at it as an opportunity cost for better  returns in equity elsewhere

Sadly I had to remove Reliance Industries in 2012/13  as a Core Recommendation because of such Risks involved and Corporate Governance Issues as below….Though I do not hold any shares,many of my clients continue to do so and are part of the three million shareholders…I hold no emotional grievance or grudge for this continued holding but refrain from advising them on the Earnings Performance & Growth Plans and the possible impact on the Share Price and whether they should Buy or Hold or Sell…left it to them to decide

Reliance Penalised Again for KG Gas Underproduction ~ Pyrrhic Government Victory

Reliance KG Penalties for Gas underproduction

Thus far the Penalties aggregate US $ 2.376 billion =>Rs 14256 crs at Rs 60=US$

Has Reliance got to actually pay these in Cash !?….. No

Reliance has gone in for arbitration for this

These are simply disallowed expenses and deducted from the Capex Expenditure & Investment Shown by Reliance and which has been cleared by the Directorate General of Hydrocarbons....the Director General from November 2004 to October 2009 was ex UPA & Congress Minister Mr Kapil Sibal’s Brother Mr VK Sibal….and it is interesting to note that when the Ambani Brothers were at each others throats in 2009 and 2010 after the Group was split, the younger Anil Ambani had openly accused his elder brother Mukesh Ambani’s Reliance Industries for hugely padding and gold-plating the Capex Spend for Clearance….he is known to have stated that the actual expenditure was just Rs 15000 crs but was shown as Rs 45000 crs and cleared in 2006 and the government stood to lose Rs 30000 crs in Gas Revenues !

….so these penalties simply reduce the Expenditure allowed to @ Rs 25000 crs…..the Directorate General began these penalties only last year in 2013 after gas production dropped below 30 mscmpd (equivalent to 180000 barrels of Oil per day)….the total investment is US $ 8.8 billion read more

Shyam Telecom continues to Fly into a different Orbit ! From Rs 16 in August to Rs 46 upper circuit now !

Disclaimer : Neither me nor my Family own Shyam Telecom as of yet and till date it has not been recommended to Clients,though some may have invested or be trading in it to take advantage of this smart movement in it’s share price in recent months

Shyam Telecom continues to Fly into a different Orbit ! From Rs 16 in August to Rs 46 upper circuit now !

It clearly derives some Value from the 380307 Equity Shares of FV Rs 10  of the total 766575760 Equity Shares that comprises 24% Equity Stake that the Shyam Group  holds in the unlisted Sistema Shyam Teleservices Ltd  (SSTL) that runs the MTS Telecom Service in India…the remaining is held largely by Sistema Russia and the Russian Federation….Actually as on March 31,2013 98.24 % of the Equity was held by just 25 shareholders and the remaining 1.76% was held by a scattering of 18034 shareholders !….SSTL remains unlisted

Shyam Telecom thus holds just 0.01% of the Equity of  SSTL which is Rs 3200 crs and just 0.05% of the 24% Stake that the Shyam Group holds in SSTL

Shyam Telecom itself had a lack lustre FY 13 with turnover dropping sharply from Rs 800 crs in FY 12 to just Rs 426 crs in FY 13 and consequently Profits dropping from Rs 2.74 crs to just Rs 5 lakhs in FY 13….The reason for this is that Shyam Telecom is the National Distributor of Handsets for SSTL and the Supreme Court Order of 2012 had cancelled many Telecom Operator Licenses (2G Scam)  which reduced the Circles of Operation including for SSTL too

Shyam Telecom has an Equity of Rs 11.27 crs (FV Rs 10) and Reserves of Rs 41.03 crs at March 31,2013 that gives it a Networth of Rs 52.3 crs and a Book Value of Rs 46.40……With SSTL Operations positioned to scale up big time in the next few years,it is expected that Shyam Telecom too will benefit from quantum jump in the National Distribution of Handsets for SSTL….The Potential for Profitability to cross FY 12’s Rs 2.74 crs seems on the cards in the next few years….This,and the small stake it holds in SSTL seems to be pumping the Share Price up fast  

The Big Question Mark now is is then what is the Value of  the unlisted SSTL !?…and here the markets and the pundits are agog with wanton speculation as SSTL continues to make exciting statements that it hopes to achieve Operating Profits by next year 2014 which would be it’s 6th year of Operations in India…It also has bagged the Right to Spectrum in the 800 Mhz auctions and a Unified Access Licence across many Circles read more

MTNL soars 60% + inside a month to Rs 16 levels from under par Rs 10 in August ! ~ What is ringing ?

MTNL has soared 60%+ inside a month to Rs 16 levels from under par Rs 10 in August ~ What’s ringing ?

The trigger was the Government announcing that they would be returning Spectrum fees of @ Rs 5700 crs to MTNL as also approving Rs 570 crs annually as pension payment ~ subject to cabinet approval

MTNL has been struggling for years with Employee costs higher than Revenues~FY 13 showed Revenues at Rs 3496 crs and Employee Costs at Rs 4904 crs !~ It’s yet got just under 40000 employees ~ It’s debt was Rs 11542 crs as on March 31,2013 and Interest for FY 13 consequently was high at Rs 1181 crs

The last Four years have been threatening ~ It began huge losses from FY 10 when it borrowed to pay the Spectrum fees ~ Rs 2610 crs was the loss in that year and four years later in FY 13 the loss has more than doubled to Rs 5322 crs wiping of the Networth which at March 31,2013 turned  and stood negative at Rs 2788 crs  ~ Equity is Rs 630 crs of FV Rs 10 with the government holding 56%

Auditors Report carries multiple qualifications although the Accounts have been prepared a s a agoing concern

Government hopes MTNL will now move back on the road to profits and MTNL itself hopes to return to the black by 2017-18

It was no wonder the Share price had dropped below par last month to it’s all time low of Rs 9.71 !~ It now has surged to @ Rs 16 with a Market Cap of @ Rs 1000 crs and very good volumes of Rs 27 lakhs shares on BSE on Friday

Glorious days were in the abnormal  2000 Year when the Share Price was Rs 390~ in 2008 the Share Price had a high at  Rs 200 levels~ since then it has been dropping

Can the Share Price regain some colour in the next three years ? Can it become a multibagger ! ? ~ it’s been a MultiDestroyer for sure ! ~ I  have been amused at some experts recommending this share in the past few years  while it kept dropping to new lows ~ they lived on while MTNL nearly died ! ~have not seen any fresh recommendations !

MTNL has tried with little or no success to bring down Employee Strength ~ it needs to significantly succeed here to be really a reckoner in the highly competitive Telecom Sector

Prepared a detailed note on the freely accessible Scrip Watch Module on our company website ~ have a look here

Straining MTNL gets a Sigh of Relief on Revival Plans ~ 13-Sep-2013

For years now I’m a subscriber of MTNL Broadband at my Residence as well as one of my offices and am quite happy with it ~ the pricing is competitive,the service is quick and I have not really experienced any serious network breakdown read more

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