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Kunj Bansal, Partner & CIO at Sarthi Group, says the stock is facing the burden of too much expectations.
Why is Bharti a laggard? In terms of screen time, more data, Bharti was supposed to be the leader. It was among the best performing Nifty 50 stocks in April and May and till early part of July before the promoters sold out.
Interesting point. A few things based on my experience. It may not be the right answer. In fact there are no right answers for such questions, because if we had the right answer, we will make far more money than what we are losing currently. Having said that, I will just observe one or two things; one, Bharti and I will add the example of ICICI Bank here --- if we look at these two stocks, the view of almost all market participants is 100 per cent positive. Now what typically happens in the market is when the view becomes one-sided, market has its own way. It does not listen to all of you. It tests your patience, takes a lot of time before reacting to that. The view may be right, but the timing may not be right. Secondly, if we leave aside the four months of market recovery, even before that Bharti was one of the very few stocks that were outperformers for one and a half years, two years. So I think a lot of expectations have already been built in. And thirdly, which is the continuation of the second point, the expectation of recovery in the sector, the sector benefitting from almost all sides, regulatory support, reduced competition and the judicial support have all become too much expectations for the stock.
These are some of the reasons. Technically, there have been weightage reduction of the stock in some of the indices on and off. So probably that is also leading to some of the selling by ETFs and index funds. But I think it is a matter of time before the stock participates. The Q1 numbers were excellent ones, the increase in Arpu from Rs 130 to almost Rs 160, a significant increase in data consumption numbers as well as the volume of data consumed, the likelihood of rate increase by the whole industry, all these things are positives.
Why is Bharti a laggard? In terms of screen time, more data, Bharti was supposed to be the leader. It was among the best performing Nifty 50 stocks in April and May and till early part of July before the promoters sold out.
Interesting point. A few things based on my experience. It may not be the right answer. In fact there are no right answers for such questions, because if we had the right answer, we will make far more money than what we are losing currently. Having said that, I will just observe one or two things; one, Bharti and I will add the example of ICICI Bank here --- if we look at these two stocks, the view of almost all market participants is 100 per cent positive. Now what typically happens in the market is when the view becomes one-sided, market has its own way. It does not listen to all of you. It tests your patience, takes a lot of time before reacting to that. The view may be right, but the timing may not be right. Secondly, if we leave aside the four months of market recovery, even before that Bharti was one of the very few stocks that were outperformers for one and a half years, two years. So I think a lot of expectations have already been built in. And thirdly, which is the continuation of the second point, the expectation of recovery in the sector, the sector benefitting from almost all sides, regulatory support, reduced competition and the judicial support have all become too much expectations for the stock.
These are some of the reasons. Technically, there have been weightage reduction of the stock in some of the indices on and off. So probably that is also leading to some of the selling by ETFs and index funds. But I think it is a matter of time before the stock participates. The Q1 numbers were excellent ones, the increase in Arpu from Rs 130 to almost Rs 160, a significant increase in data consumption numbers as well as the volume of data consumed, the likelihood of rate increase by the whole industry, all these things are positives.
1 Comment on this Story
Abel Kine There is definitely some kind of market manipulation here. Last month 600CE has huge call writing and prices braked at 599. This month there seems to be similar kind of put writing at 500PE. Who is doing this writing? |