Absolutely, correct. It is a very big event as far as Indian markets and politics are concerned. We have to be
cognisant of this binary event but apart from that, there are a couple of small events. There is a US Fed met on 12-13th . On 13,th we will get to know if the US Fed is going for the 25 bps rate hike which is pretty much factored in. We will also have to see the commentary around it's non-farm roll pay data and how the US market reacts.
Also, we have to remember that we are heading towards the last half of December where the FII activity slows down significantly and therefore, domestic news flows particularly Gujarat election results will have a significant impact going forward for the rest of the month.
Is there merit in relooking at Bharti? It's Africa business is on recovery mode and more importantly there is no big giant competition in the likes of Reliance Jio in Africa .
Yes, in fact there have been a few positive developments for Bharti and market is recognising that fact. You are also right about what is happening in Africa. They did get their strategy right initially and now I think they have put the thing back on track and things are improving in Africa. Of course, they can improve from here and I am sure that will happen. Looking at domestic business, up to a point, Reliance Jio was aggressively going on reducing prices and revenues were coming down for pretty much for all the operators but we strongly believe that phase is over. Reliance Jio is also looking to start earning revenues and they have already started charging customers and that augurs well for all the other dominant domestic players.
So, the ARPU erosion which we had seen in India may not continue any further and things can only improve from here on even for the Indian market. Being the largest player in India, that benefit will definitely go to Bharti. For investors who believe in telecom, it is a good time to enter Bharti Airtel.
Is Biocon your top pick when it comes to pharm?
Biocon is doing right and things can improve but considering the valuations I probably will not go and buy Biocon at current levels. In the pharma pack, we like Strides Shasun quite a bit. The domestic business divestment which they did to Eris, was the right strategy. The deleveraging which is happening for Strides Shasun will help the company balance sheet and profitability. Also, they will be more focussed on their growth markets which is the US and the UK and also the emerging African market. Considering the valuations on the pharma pack, Strides Shasun will be our top pick. We believe it can go up to Rs 1200 in the near future.
ET Now: On all counts, Jet has been a disappointment. What is it that you do when the rest of the peers month on month have been posting such excellent load factors, passenger traffic and now we are approaching the Holiday season. What story do you bet on within aviation?
Let me first comment on Jet. I think to be hugely disappointed because of this result probably is unfortunate because they had a one-time income in the similar quarter last year on account of some aircraft sale — about Rs 137 crore. You have to take the current result along with that extraordinary item and compare. So that is point number one. Point number two is you are absolutely right in saying that we are getting into the holiday season and the Christmas, New Year. This is an excellent season for airline companies and domestic business is doing all right.
There were some issues with the global revenues and that is what we will have to see how they pan out but for a little aggressive investor, considering that aviation is becoming more and more popular and also profitable, I would like the aggressive investor to go and buy taking the opportunity of this correction as far as Jet Airways is concerned.
On the other hand, if I have to buy one stock at current levels probably I will go and buy Spice Jet. There is still room for upside in Spice Jet at current levels.
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