India Morning Report: Bharti Airtel improves India offtakes, pecking order unlikely to change for markets

Bharti Airtel Lanka
Bharti Airtel Lanka (Photo credit: Wikipedia)

 

The improvement in EBITDA to 31.7% obviates the other stream of bad profits from Bharti and one can wait for the stock to become available under 280 but the reassuring move from 275-330 is well safe as the dust settles down on another quarter on sharp cuts in reported profit again likely affected by one time items surging thru the global major’s rupee balance sheet every other quarter. Within, Telecom Bharti remains #1 in new customer acquisition data for March as well close to 3 million new connections in mobility and revenue increases seem defined upticks than Tata and rel Comm’s occassional blips into civilisation before going back. ARPU is no longer an orphaned series at INR 195 per month. The earlier quarter ARPU was at 193 and probably year ago as low as INR 188

 

Bharti’s INR 60 B Africa revenues too count for a major incursion into India’s new favorite FDI market since 2008, gaining FDI volumes close to China’s push FDI in the dark continent. One has however capped that $15 B investment as resource sectors apart , tales of stability and consumption in Congo and Somalia are more the exception than the rule

 

Brand India in the meantime relies again on infraco fund infusion but as election years go, this one may still be counted as one of the more peaceful with rare positive excursions by FIIs and outside India analysts into the country even when news from ECB and Fed remains critical to the direction and size of funds flows in the markets

 

Banks have been subdued for the Bankex and the Banknifty trading lower from all time highs in ait for an opportunity but some components of the bank sector indices are still likely to head south and negate the just aborted psu rally on their own steam as the difference within the PSU herd also shines and the threat of new competition makes the private sector bans stampede the rural consumption markets faster and grow back the consumption story still going strong in unbridled double digit CPI series for both rural and urban. IIP services data follows on Friday and as it would compare across US, Europe and China, it may well define strength for India inc.

 

Manufacturing R&D as a business segment has reached $10 B in India from more than 200 captive units of global majors, while pharma outsourcing is likely to regain captive strength as wwelll in light of the affordability linked rulings in Indian courts. China meanwhile is a real physical threat knocking us on the borders in its own inimitable ‘sleight of hand’ show on Ladakh and Arunachal borders showing up the importance of increasing defence allocations and arms spending while the Freight corridors and even the NMP supercities of Dholera seem to be threatened by the lack of movement on Land reform bills and external funding

 

 

 

National Manufacturing Policy / Zones

The NIMZ cities identified in the latest manufacturing policy area compendium of all identified microsites and

English: A new train, made in Germany by Bomba...
Image via Wikipedia

large successes of India in manufacturing policy over the last decade. Japan funded Delhi Mumbai infra corridor, the industrial zone at Manesar or the village Dholera in Gujarat identified for investment can start in quick time. The Dedicated Freiht Corridor needs $7-8 bln, the DMIC even $40 bln or INR 2 Tln for itself, Japanese providing $10 bln and Private sector to be willing ot invest the rest

With a new Land acquisition bill, which nevertheless does not make it easy for someone to single handedly establish or grow a city in the wilderness( attract good talent for one, attract suppliers and ensure all resources in supply for another) ┬áis still as difficult but where land acquisition and construction for manufacturing can begin like in Manesar, Haryana or Dholera , Gujarat can show the way to others if done right. Unfortunately winners do not include last decades export successes like Textiles and Auto ancilliaries and Services will be denied its place in the sun if it remains a National “manufacturing” Policy. The Buddh International Arena in UP near New Delhi with a NCR, Delhi address tag is a great success showcase for others.

Also, like Indian banks being told off in foreign lands, foreign banks in India like ICBC and CCB that have just opened should not be allowed to club their business with that of the parent country as it will stifle local opportunity esp where such large investments are expected by local satraps and a regular scam-o-rama is keeping the media busy from 2G to Mamta Banerjee Europe , in contrast has global companies and diaspora ( not remittances) that make such partnerships with banks global in thei rvery nature instead. Sadly some of them will leave or forfeit plans of growing in retail if they ever nodded to RBI

A couple of other ‘contradictions’ have to be managed in India, including letting farmers a share of real estate profit with the new bill in hand allowing prices without governemnt interference, delevraging required in the real estate satraps specialised for such acquisition incl DLF, JSW and maybe JP ( not delevraging but has hands fuull) or the new crop wlike India bulls and Adani which have to bear the blame for endless delays in the Power sector or the consumption successes like PVR and mall owners who are making profits only in the super luxury investments. Also India’s labor participation rates could soon be dropping below 65% ( nearly a low 60% in the mediterranean Euro crisis owners) and US that provided a great land of opportunity for educated talent from this country, also suffering a low participation rate of 64%

Interesingly India’s export growth, still keeps machinery in the largest categories, and should soon include

The Rashtrapati Bhawan which is the residence ...
Image via Wikipedia

pharmaceuticals as well. Perhaps Farming can be mechanised, along with Textile cities and Auto ancilliary dreams. Loan mela, anyone?

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