Wednesday, October 13, 2010

VIEW ON RELIANCE COMUNICATION AND TELECOM SECTOR

Dear Sir,
can you help me, and I want to know about "Reliance communication", is it good to buy now for 1 year prospect?
can i buy present price.
pls send me funamental analysis
Regards,
Animesh Shedge.

I already say to my blog readers that telecom sector is a good contrarian sector for next 2-3 year view. I think you may already read my former article “TIME TO MAKE A SIP IN TELECOM SECTOR “ if not read please read it in following link
http://sharegenius.blogspot.com/2009/11/time-to-make-sip-in-bharti-and-r-com.html

I like BHARTI AIRTEL, REL COM ,IDEA, TATA COMUNICATION , and MTNL at currant price for 2-3 year and strictly believe that after complete set up for 3G these company balance sheets turn in positive and all of these stocks give 300-500 percent return in 2-3 year.

But in these 2-3 year these stocks is underperforms the market so please do not rush to buy it because due to huge investment in 3G infrastructure these companies record losses in there balance sheets and may seen more downside in these 2-3 years but after that I think one could see a huge rally in these stocks if he /she buy it in SIP method.

Now I tell you that I like which stock more in above 5 stocks and why?
I like TATA COMUNICATION in above 5 stocks and why? So read following reason that why I choose tata communication in above 5 stocks
1. I give first priority to low equity stocks , low equity means less share capital it give us a high EPS. And more chance to issue bonus share. So equity capital of IDEA has 3100.1 cr., BHARTI has 1898.6 cr., RELIANC COM has 1032 cr., MTNL has 630 cr and TATA COMUNICATION has 285 cr.
2. Face value of TATA COMUNICATION is 10 but bhari and r com face value is 5-5.
3. book value of bharti is very low you wonder that it is only 72.5 but r com book value is 250.4 , tata communication book value is 238.5 MTNL book value is 191.4 so bharti is not a value buying due to it book value is lower than MTNL.
4. Promoter holding of BHARTI AND R COM is 67.83 And 67.85 but TATA COMUNICATION promoter holding is 76.15 percent.
5. Please read disclaimer before investing r comand mtnl is in my personal holding and in bharti, idea, my holding is zero.
6. Please note that TATA COMUNICATION ( BSE code 500483) and TATA TELE MAHARASTRA LTD. are separate companies . SO DO NOT CONFUSE TTML AS TATA COMUNICATION.

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