HI
I think members are allbusy in trading and probably have already done fundamental investment to worry about investment in 2006 when market is at its highs.
However I will tray to justify my suggestion of investment in bharti.
You can see
financial result for first half 05 for Bharti.
Salient features are:-
Net Sales 503924.00
Profit(+)/Loss(-) Before Depreciation & Taxes 174083.00
Depreciation 64381.00
Profit(+)/Loss(-)Before Tax 109702.00
Provision for Taxation 13487.00
Net Profit(+)/Loss(-) 96215.00
Adjusted Net Profit(+)/ Loss(-) 96215.00
Reserves Excluding Revaluation Reserves 416831.00
Dividend (%) 0.00
Basic EPS (in Rs.) 5.13
Diluted EPS (in Rs.) 5.10
Compare this with
Fy04 first halfResult of Bharti.
Net Sales 356443.00
Profit(+)/Loss(-) Before Depreciation & Taxes 118266.00
Depreciation 47898.00
Profit(+)/Loss(-)Before Tax 70368.00
Net Profit(+)/Loss(-) 62983.00
Reserves Excluding Revaluation Reserves 0.00
Non-promoter Shareholding (%) 0.00
Its net profit has jumped by more than 50%.It has build up huge reserves fund. So it can fund expansion plans to cater to the growth in mobile matket.
It has more than 25% of mobile market and is the largest player.
Mobile telephony is set to grow.
Its stratagy to encourage use of value added service by way of voting, participation in contest etc will bring in more revenue without incremental cost.
India one policy if implemented will give boost to telephony.
Bharti PE is around 63 at current prices.But it does not take into account reserves which was built up during 2005. With that its actual PE should be 12 which is a huge. It has not yet paid dividend.
Other parameters are
Year Ending
31/03/2003 31/03/2004
31/03/2005
RoCE %----------
1.2------ 10.6
----18.3
RoNW %----------
-6.4 ---- 13.9
----27.2
Debt to equity ratio-
0.8---- 1.0 ----
0.9
Currently bharti is consolidating around 300-344. In one year it is likely to outperform the market and post return in excess of 100%. Target price above 600 by dec2006.
learned members can comment on this for informed decision.
Entry price may be indicated by TA as it is currently in consolidation range before breakout.
regards
pankaj