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India Equity Research Reports, IPO and Stock News
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Asia MarQuee list
Adding Bharti Airtel
A cheap defensive play for tough times
We are adding Bharti Airtel to the MarQuee Buy list as we believe the stock has
fallen too far, too fast and now provides a good entry point for a defensive play
during a volatile period, and simultaneously giving plenty of opportunity for
growth investors. With over 30% upside potential from Tuesday’s closing price
and the stock at near six-month lows, our analyst Unmesh Sharma believes the
stock is now too undervalued too ignore.
Negatives over-stated…and now is a good time to enter
Bharti has fallen 16% from its recent peak and has underperformed the local
market since the rupee began to depreciate sharply in September. The stock
also has been under pressure because of concerns over spectrum charges and
the potential of a 3G price war, both of which Unmesh believes to be overstated.
He says in his report of 23 September that the stock has been unfairly sold down
because of fears over spectrum payments that Bharti maybe asked to make and
that would hit earnings from 2015 onwards. But, he adds, the likelihood of this
happening is less than 10% while even the worst-case scenario is already built
into the Bharti balance sheet.
Further, although he expects price cuts in the 3G space by many operators, it
will not amount to a price war, an event he believes the market and consensus is
placing too much weight on.
With one of the fastest operating cashflow growth rates in the sector, Bharti is
one of Macquarie’s top global telecom picks and is complemented by Prem
Jearajasingam’s Outperform rating on Singtel, which he reiterates in a separate
note published today, while in a second note also published today, Unmesh says
the worst news from Bharti’s investment in Africa seem priced in.
Bharti Airtel (BHARTI IN, Rs370.00, Outperform, TP: Rs483.00, Unmesh
Sharma)
And a change in Japan
Our head of Research in Japan, David Gibson, on Tuesday swapped two names
in the Japan MarQuee list, adding Yokogawa Electric and removing Marubeni,
one of the original MarQuee Buy ideas from Japan. Our Yokogawa Electric
analyst Damian Thong says the company may soon exit the chip-tester
business, a major catalyst for the stock that could eventually see the shares
double over a three year period, while with Marubeni, a volatile copper price and
economic concerns are weighing heavily on the stock. Given that we think these
are likely to continue in the short term, David believes this was an appropriate
time to remove the name from the list.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Asia MarQuee list
Adding Bharti Airtel
A cheap defensive play for tough times
We are adding Bharti Airtel to the MarQuee Buy list as we believe the stock has
fallen too far, too fast and now provides a good entry point for a defensive play
during a volatile period, and simultaneously giving plenty of opportunity for
growth investors. With over 30% upside potential from Tuesday’s closing price
and the stock at near six-month lows, our analyst Unmesh Sharma believes the
stock is now too undervalued too ignore.
Negatives over-stated…and now is a good time to enter
Bharti has fallen 16% from its recent peak and has underperformed the local
market since the rupee began to depreciate sharply in September. The stock
also has been under pressure because of concerns over spectrum charges and
the potential of a 3G price war, both of which Unmesh believes to be overstated.
He says in his report of 23 September that the stock has been unfairly sold down
because of fears over spectrum payments that Bharti maybe asked to make and
that would hit earnings from 2015 onwards. But, he adds, the likelihood of this
happening is less than 10% while even the worst-case scenario is already built
into the Bharti balance sheet.
Further, although he expects price cuts in the 3G space by many operators, it
will not amount to a price war, an event he believes the market and consensus is
placing too much weight on.
With one of the fastest operating cashflow growth rates in the sector, Bharti is
one of Macquarie’s top global telecom picks and is complemented by Prem
Jearajasingam’s Outperform rating on Singtel, which he reiterates in a separate
note published today, while in a second note also published today, Unmesh says
the worst news from Bharti’s investment in Africa seem priced in.
Bharti Airtel (BHARTI IN, Rs370.00, Outperform, TP: Rs483.00, Unmesh
Sharma)
And a change in Japan
Our head of Research in Japan, David Gibson, on Tuesday swapped two names
in the Japan MarQuee list, adding Yokogawa Electric and removing Marubeni,
one of the original MarQuee Buy ideas from Japan. Our Yokogawa Electric
analyst Damian Thong says the company may soon exit the chip-tester
business, a major catalyst for the stock that could eventually see the shares
double over a three year period, while with Marubeni, a volatile copper price and
economic concerns are weighing heavily on the stock. Given that we think these
are likely to continue in the short term, David believes this was an appropriate
time to remove the name from the list.
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