What are you expecting by way of ARPUs, in terms of their overall subscriber additions, management commentary and headline number from Bharti?
I think Bharti’s numbers are going to be good. Let us put it this way. On a consolidated basis, Africa has been doing very well. Airtel Africa has now been included in the FTSE index and that was big news and the African business has finally turned around and that is the cherry on the cake. As far as India is concerned, we know that ARPUs have started moving up. All the companies actually have taken a price hike and that augurs well for the industry because this is what was not happening for a very-very long time and now finally that has started. So expectations are of a good quarter.
Of course, the full impact of the hike they have taken will be visible in the next quarter which is Q4 but at least the beginning will be there. Also remember that the government has announced that the 5G auction will happen in the next fiscal itself. Somewhere we will have to see how Bharti tanks up for that because obviously they will need to bid and they will need to bid aggressively for having their presence in the 5G.
As far as subscriber additions are concerned, month on month numbers do come out and we know that numbers have been pretty good. They have been much better than any other peer and that has been a commendable effort considering what Jio has been doing and how Jio aggressively has been moving in the market. But Bharti’s number addition has been remarkable. They have been probably gaining at the cost of Voda-Idea. Considering all this, the results will be good but the valuations are also looking kind of full at this level. Unless there is a knee-jerk beat from the expectations, there will not be too much upward movement at this stage.
What are your views on some recent tech heavy IPOs? There has been a rout of sorts when it comes to Meta and that has seen the entire tech heavy Nasdaq take quite a bit of walloping. But the situation is quite the opposite in the case of Amazon. Does one need to examine companies on an individual basis rather than putting them in one basket?
Absolutely, in fact I have been an advocate for that. You cannot paint everybody in the same brush. Even to take your example of what happened to Facebook parent and the kind of market cap they lost, look at what happened to Google. I think their results were good and they did well and they have been doing well in the market. So yes, Nasdaq did correct because of the significant bloodshed we saw on Meta, but on the other hand Google parent gained and Google parent has been doing well. Amazon has been doing well. So it is not the same thing. We have to start distinguishing between companies and their performance and potential.
The same thing pretty much applies to recent Indian tech IPOs. One can’t compare Paytm with Policybazaar and some of the other companies which came with IPOs. We have to see the profitability, the business and the potential of a business and kind of ascribe valuation to that. We have seen significant corrections of these new IPOs even in the Indian market and probably the investors are now going back to the tried and tested metric of valuation based on profits and sales and realistic multiples at that.
Indian IT companies, both largecap and midcap, are to an extent homogenous. They all have solid demand as things stand today. So I would not like to compare them with Meta or Alphabet or Amazon. They are in a different league. But having said that, Indian companies in their own space are doing well. There is solid demand. The management has been extremely positive of pretty much all the IT companies and we believe that medium to long term, Indian IT companies are in for a good time.
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