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Anil announces GSM foray, promises exciting tariff December 31, 2008

Posted by dhirendra1972 in Asian Markets, Asin Share markets, Equity, Equity Investment, Equity Market, Equity markets, Finance, Financial Capital, financial market, Loans, Local Equity Market, Local Market, Online Marketing, Open Market.
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Good Evening friends,

I think Anil Ambani is going to give some extra ordinary surprise to people of india. He just announce that his headed company Reliance Communications is going to come up with GSM mobile service in first week of January 2009.

 

Anil Ambani, head of Reliance Anil Dhirubhai Ambani Group (ADAG), on Tuesday announced the launch of Reliance Communications GSM mobile phone services in the first week of January 2009.

 

He did not announce the tariff plan details but promised “GSM (tariff) rates that will make people forget the Rs-501 CDMA offer of 2003.” Reliance currently has 60 million customers, including over 1.7 million individual overseas retail customers.

 

The tailored bouquet of GSM and CDMA mobility platforms gives Reliance customers the option to choose the service. Around seven out of 10 people opt for GSM service while churn out of CDMA users is less than 2 per cent.

 

“We will cover 11,000 cities, 24,000 towns and more than 60,000 villages. We will be covering all railway routes and national highway to give the best and cost affective service to our customers,” said Ambani. Rs 10,000 crore has already been invested in the GSM venture, Ambani said. “Reliance Communication will participate in 3G spectrum auction on both CDMA and GSM platforms, and it will be on the national level,” Ambani said.

Equity – Is it the right time to buy? December 17, 2008

Posted by dhirendra1972 in Bluechip Companies, Book Value, Book Value Approach, Bull Market, Current market meltdown, Earning Approach, Equity Investment, Future Growth.
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The current market meltdown has left investors shocked and stunned. The important question in everyone’s mind today is does the market have further downside left or has it bottomed out? Nearly everyone is offering some or the other opinion on this question. The economy has posted a growth of 9% in FY08 and the future growth, although slower, is expected to remain around 7%.

Earnings Approach

We expect earnings per share of Sensex companies to remain in the range of Rs 900-950 levels in FY09. FY 10 is likely to post a negative return of around 20%, though the picture will become clearer after the Q3 results come out in January. 

The current level of Sensex implies 10.0 x – 9.4 x P/E of FY09 earnings and probably around 12.5x – 11.3x of FY10 earnings. Historically, since 1991, Sensex has traded in the range of 10-30 times one year forward earnings. So, currently the Sensex is certainly at the lower range of the historical P/E band. Even if things are likely to be different this time due to a worldwide recession, we do not expect more than 20% downside from these levels.

Book Value Approach

Also, if we consider the book value of companies, many bluechip companies are trading below their net worth. Moreover, the current P/BV (Price to Book Value) of Sensex is hovering around 2.3 which is in the range of historic lows of 2-2.4. In last 18 years, whenever the P/BV ratio had drifted to around 2, it has been followed by a smart pull back. For example, in November 1998 when Sensex fell to around 2800 levels (P/BV of 2), the next six months witnessed a strong pullback rally of more than 40% pushing the index to 4000 levels.

 

Ref: theeconomictimes

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