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Falak Kalyani

@frkalyani
2 years ago ~50 views
Hi @Swapnil Kabra , I started looking at Airtel. At the beginning itself , below were the few points which made me uncomfortable to invest in this company.

1) It is growing on steroids. Look at the growth in Total assets and Borrowings w.r.t. its growth in sales. It's borrowings increased from 10Kcr to 118K cr (I know this incl Deferred Payment Liab) but this is huge when you see its revenue grown from 42Kcr to 107K cr.

2) If I look at the loan profile,
Loans worth 67K cr (Deferred Liab) has int rate ranging from 8 - 10%
Loans worth 16K cr has int rate ranging from 1.4% to 15% (this is extremely high)

Total FIX rate INR borrowing of 75600 cr and floating rate borrowing is 9400 cr, at WAR 8.57%.

In rate increase scenario, little inc. in rate will impact margins.


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Swapnil Kabra

@swapnilkabra
2 years ago ~60 views
Falak bhai, my thesis is actually very simple:
1. Telecom will not witness new competition soon. There is huge consolidation in this sector.
2. I am more interested in ARPUs and how they can increase. ARPUs have been very low. The direction now is clear after the recent tariff hike.
3. Airtel and Jio are going to eat VI's market share. There is enough data that substantiates this.
4. Look at the areas where Airtel is expanding. Their business segment (14% of revenue) is something no one talks about. It is the future.
5. They have been very aggressive in broadband and DTH area. Again, they have increased their market share here.
6. With bundling of services and increase in ARPU and migration of customers from 2G to higher versions, can help Bharti generate cash enough for capex as well as deleveraging.
7. Basically, I am not looking at the past. I'm more interested in future. Internet consumption and penetration is going to go up. And Bharti can be one of the biggest beneficiaries.
Plus, there is also a value unlocking part. Too early to comment on this. But, Bharti is a big group.
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Falak Kalyani

@frkalyani
2 years ago ~60 views
yes, business segment is growing at very good rate. They have also invested significantly in machinery in last 2 years. should not we wait for it to deliver as per expectation and then invest or go slowly?. pls consider this as knowledge sharing and not criticism
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