Thursday, December 7, 2006

Bharti Airtel Vs Reliance??

These are the two major players in the Indian Telecom(mobile) Industry. I suddenly came across the Article saying “Airtel goes ringing in US”. Yes!! Airtel has now started its service in USA. So all those NRIs can now call back in India using their really cheap service. (7.9 cent per min) as compared to Reliance (13 cents per min).

Hearing this news I went to their website and I really got pissed off. The site took years to get loaded. I was just wondering if their website is so bad.. should I even give a try to their service.

I have been using Reliance service from a long time. Their website is sweet and simple. Its just too good. Its really bad to see such a slow website from AIRTEL.

Now if you look at their Balance sheet you see that Airtel is loaded with lots and lots of Debts. I do understand that the Telecom industry is use to all this debt. Most telecom giants have to invest lots and lots of money to build up the infrastructure. But I think in that respect Relaince is too good. No debt at all. That’s why it has such a high P/E ratio.

Airtel is doing is Volume business. It has the largest subscribers in India Followed by Reliance. But I think Reliance has a very good edge over Airtel. Its DEBT-FREE. I think that makes a lot of difference.

Now this reminds me of a call I made with the Airtel customer care when I was in India. The Airtel prepaid service had deducted Rs 25, just for no reason. Later it was known that their billing system had some problems. I remember the customer care personnel was literally begging me to keep my service with them. It was really pathetic. But now I know what’s the problem.

With so much of Telecom stuff going in India. I think it makes sense to stick with Reliance.
Reliance communication stock will always be a leader as compared with Airtel, atleast for the next 5 years.

Saturday, December 2, 2006

The Retail Industry in India.

Suddenly the Retail Industry in India has caught on fire. Reliance, Tata, Pantaloon, the USA biggy Walmart and many more are interested in opening or expanding their retail chains in India.

Are these stocks really worth it?? I guess the answer lies in looking at Walmart in US. If we look at Walmart’s stock we can see that in the early stages of inception their stock kept rising but currently its more of a sinusoidal wave. Why do you think that’s the case?

Well if you try to understand it from Warren Buffet point of view. It’s a volume based cost dependent business. The mall that will sell the cheapest goods will have larger volume and will be winner in the game. But when you sell goods cheaper it will naturally affect the bottom line. Its gonna be a tough game to sell cheap goods with so much of competition. These Stock are not worth it. They are already trading at 100+ P/E. I just don’t get this.

If you still want to pick any of these retails stocks then here is the answer.
Retail + (very low Debt to Equity Ratio) + (low P/E) = Winner.

Friday, December 1, 2006

Britannia, Venkys, whose next?? Or did I miss someone.

The Sept 2006 qtr for Britannia wasn’t good. They missed the profits by 50% as compared to profits for Sept 2005 Qtr. They accounted this due to heavy raise in cost price for Wheat.

Similar case happened with Venky’s they reported a loss due to heavy raises in cost price for Maize. Venky seems to also manipulate the market by performing buy backs on the stock so that the stock will not plunge down drastically. I don't know whether I should consider good or bad?? Genrally its considers good.

Britannia has been missing its profit levels since last two qtrs. I was just wondering. Why the hell they didn’t take any action.

Why don’t do they keep track of the major raw material they have been using? Wouldn’t that allow them to manage things better?? I hope they would come up with something better. I hope these stock gets beaten up more during the next quarter.

These are good stocks and they are gonna cope up in next 2-4 qtrs. They seem good for long term.