First a disclosure – I own Bharti Airtel in my portfolio, as I’d disclosed via a post in March.
I had bought the stock in October 2009, at an average price of Rs 301. Given the fall the stock has seen over the past few months, which has been compounded by continuous weak results from the company, my investment is down almost 13%.
So what’s my next course of action with respect to the stock?
What to do with Bharti?
When a stock crashes to below your purchase price, there are three distinct actions you can take:
- Sell the stock at a loss, if you don’t have the stomach to withstand losses, or if you realize that your original investment was a mistake, or
- Buy more, either to average your costs lower, or when you have a great conviction on the company’s long term potential, or
- Do nothing, either because you are frozen with fear and don’t want to sell at a loss, or you don’t have cash to buy more of the stock.
So which of these three actions am I taking with respect to my investment in Bharti?
First, my brain scan
Before I talk about my next course of action for Bharti, let me understand (and publicly announce) the biases I may be suffering from looking at the continuous fall in Bharti’s stock price.
The reason I am doing this is because I believe you will easily relate to this, as you might have faced a similar situation with a falling stock in the past.
So here are the “some” of the many biases that are gripping me with respect to Bharti as of now, and how these can lead me to make an incorrect decision…
1. Recency bias
No doubt, there’s a lot of bad press Bharti is getting these days, like…
- Competition in telecom sector is getting tougher
- Regulations are getting complex
- African business remains under pressure
- Balance sheet is stretched
- Profits are under pressure
Don’t get me wrong, but these are some harsh realities the company is facing as of now. Add to this, the business media is doing a great job of plastering this across, thus adding to my woes as an investor.
Wherever I look, I can see fingers pointing at Bharti as if the company and its stock are going to zero!
Here is what Nassim Taleb wrote in his Fooled by Randomness…
People fail to learn that their emotional reactions to past experiences (positive or negative) were short-lived – yet they continuously retain the bias of thinking that the purchase of an object will bring long-lasting, possibly permanent happiness or than a setback will cause severe and prolonged distress (when in the past similar setbacks did not affect them for very long and the joy of purchase was short-lived).
Cut to my emotion just a few moments before I bought Bharti (or when I’m buying any stock) – “This is a great stock and if I buy it now, good things will happen to me.”
Now when I see the stock crashing as if there’s no tomorrow, I exclaim – “God, why only this stock? This slide will kill me!”
If you read the two statements carefully, you would notice that I expect both the feelings of ecstasy (while buying the stock that is expected to rise) and despair (while seeing the stock fall below my purchase price) to be long-lasting…permanent.
This is exactly the reason most investors (including myself) are so prone to make knee-jerk reactions as soon as things take an unexpected turn against what they expected.
In case of Bharti, the bad news all around might lead me to either of these two knee-jerk reactions:
- Buy the stock just because it has fallen and I want to average
- Sell the stock because I can’t take the loss anymore
There’s no third option of “holding” the stock because then I won’t be reacting to news, which is out of context here.
So the recency bias can lead me to an incorrect action with respect to my holding in Bharti.
2. Availability bias
Accompanying this will be the availability bias, which may lead me to over-estimate the likelihood of something that is more available in memory.
Since there is so much bad news available for Bharti as of now, I might end up over-estimating their impact on the company…even when I’m a long term investor.
The vivid images of “Bharti’s stock tanking by 10%”, its “profits crashing by 37%”, “interest costs jumping” etc. etc. might capture my mind and again lead me to “sell the stock before it’s too late”.
On the contrary, just the fact that “the stock has fallen to its 52-week low and being contrarian pays a lot” can lead me to buy more of the stock…again “before it’s too late”.
3. Overconfidence bias
A common thought I’ve had when a stock has fallen below my cost is – “I know the story, so I must not be worried. I will continue to hold on whatever everyone is saying. In fact, I’ll buy more.”
At other times in the past, I’ve thought – “I’m sure something is wrong with this stock’s story, or why would everyone be dumping it? I will sell it right away!”
You can notice my overconfidence at both these instances, right?
In the first case, I am confident what I am doing. In the second, I am confident what others are doing.
But is it my confidence or overconfidence?
No doubt it’s overconfidence, or why will I want to act immediately on my (or others’) thoughts and actions, instead of doing the hard work of finding out what’s right and what’s not!
So my overconfidence might also lead me to incorrectly judge the situation, which will lead me to making a mistake (which I will only realize later!) of either buying or selling the stock.
4. Anchoring bias
In investing, a stock’s past price never dictates where its long-term future lies.
What matters for you to decide whether a stock is a buy or sell is its current price in relation to its current intrinsic value.
In the same way, getting anchored to a particular price from the past can be dangerous to my current action and future profits from Bharti.
Let me help you with another example.
Assume I bought Bharti some time back at an average price of Rs 300 per share. The stock went up to Rs 350. I had some spare cash to invest but I avoided Bharti because the stock was up 17% from my original price.
The stock rises further to Rs 400 because the business is doing well. While I’m happy for my original investment, and still have some spare cash, but I don’t invest more in the stock because it is now 33% more than my original buying price.
Notice that I’m anchored to a price of Rs 300 here, and all my subsequent decisions are based on this price, instead of any additional research on the business (to find out the reason for the stock’s rise).
The story doesn’t end there. From Rs 400, the stock falls to Rs 360. Now I buy into it, because my new “anchor” is Rs 400 (and the stock is down 10% from that!). It falls further to Rs 320, and I buy more, anchored to Rs 360.
Then, as the business deteriorates (and I’m not aware of that), the stock falls to Rs 275, below all my purchase prices and especially below my original cost of Rs 300, which is now my strongest anchor.
This is where the hell can break loose, and might lead me to again take a wrong decision with respect to my holding in the stock.
Replace this assumed scenario with reality, and there’s a great chance that I might succumb to the anchoring bias.
5. Confirmation bias
Now I am very sad seeing my losses and want to sell my Bharti stock at all cost. But I am still looking for a final validation of my thoughts.
So I can only hear people who are recommending a “sell” on Bharti. As of others who are still holding a positive view on the stock, I not only avoid them, I cast aspersions on then thinking capabilities.
Alternatively, if I am itching to buy more of Bharti because the stock is down, and I’m a born contrarian, all I will look for are people who are advising a “buy” on the stock. As of others who are recommending to book losses on the stock, I will simply shun them.
The point is that I am, as a potential buyer or seller of Bharti’s stock, looking for someone to confirm my view. Another dangerous bias I might fall into!
6. Loss aversion bias
While looking at Bharti’s falling stock price, my next decision has a great likelihood of being dependent more on the loss I am incurring instead of the “risk” I will be taking by buying more/holding/selling the stock.
As a typical investor, I would be bent on avoiding any kind of loss.
One way I can do this is that, despite seeing any red-flags in Bharti’s business (in case they exist), I would avoid selling the stock because “I’m sure this will rebound!”
Then, I may even buy more of the stock to average down my cost and thus “reduce my losses”.
Here is where I will also suffer from the “mental accounting bias” by convincing myself that – “By lowering my average cost, I will reduce my percentage losses in the stock.”
This is like saying that when I lower my average cost from Rs 300 to Rs 280, my percentage loss at the current price of Rs 260 will drop to just 6%.
I simply ignore the fact that if I was incurring Rs 10,000 loss in Bharti earlier, my loss would remain the same even after I average out! So the “amount of money” I’ve burnt in Bharti will remain as it is (if the stock were to remain at the current levels).
But then, you see, all I’m trying to avert is a “loss”…whether I avoid selling the stock at a loss or average out my cost!
“Vishal is a house full of biases!”
You might be longing to believe this by now, isn’t it? By the way, you are right. Like any investor, even my brain is not 100% insulated against behavioural biases.
It contains the same chemicals that run through any human brain.
But then, I’ve heard that there’s a great power in publicly announcing your imperfections, as that pushes you to take notice of them.
When I am looking at my behaviour in front of a mirror, however foolish I may be acting, I will always think myself to be a superstar. And then I might suffer from even great amount of biases. But when I let someone else know about my eccentricities, I may try to mind my behaviour better to avoid looking foolish (so here is my selfish reason to write today’s post :-)).
Anyways, that is also what I expect to know from you. Let me know the biases you face in a situation like I’m facing with Bharti as of now.
How have you behaved in such situations in the past? What was the reward/punishment of your subsequent action?
Okay, enough! What am I really doing with Bharti?
I know there are a lot of you who are cursing me by now for not talking about my stance on Bharti.
So what am I really doing with my investment in Bharti?
Well…I’m doing nothing!
Saying it the other way, I’m holding on to my investment in Bharti.
I am not buying more because I’ve already allocated my savings and thus have no excess cash to add to this stock as of now.
I am holding because I’m convinced about the long term business of Bharti, despite the underperformance it is seeing currently (or over the last 10 quarters, as business media is shouting out).
My reasons for the same haven’t changed much over the last few years – competition was as tough then as it is now, and regulations were as complex then as they are now.
Of course, the pressure on profits and additional debt on the balance sheet due to the African acquisition has led me to lower my intrinsic value estimates for the stock, but that might change again in the future when the company gets back to better P&L performance and a better balance sheet (which I believe Bharti’s management is capable of doing).
All in all, my call on Bharti is based on my view of the management and its capital allocation skills (the return on capital, though low as of now, is still best in the industry).
Plus I have a great faith on the company’s last-mile connectivity with 260 million consumers in India. Which other company in India (except maybe HUL and ITC) can boast of such a close connection with consumers?
While looking at my investment in Bharti, I am looking at the opportunity cost of my investment in the company. In staying invested in Bharti, what am I missing on in terms of better quality businesses that have the capability to be highly profitable (as Bharti has shown in the past despite high competition)? Not much, I believe.
Of course, I may be proved wrong in the future and Bharti could turn out to be a mistake, but then as someone told me about an important rule of human life – “There are no mistakes, only lessons.”
What do you say?
Thanks Vishal 🙂 this is a really useful post, “live” on what should you do…I hope you’d write a StockTalk about Bharti too sometime…
This post reminds us of what all can go wrong with “us” when we’re investing…so a really appreciated one!
Thanks Sunny!
Hey Vishal,
Good article. Very well implementation of Sanjay Bakshi Sir’s knowledge.
I am glad for 2 reasons. 1st, I picked up stock probably around same time as yours and very close to same price as yours (Rs.275). Felt good with the fact that Genius mind think alike.
2nd, I too decided to hold on to this with long – term view. I, unfortunately, did not go through the bias list as you mentioned but believed in Bharti’s long term story. Now I believe, fools seldom differ.. he he.. Just kidding.. hope you take it in true spirit.
As always, keep writing and keep educating all of us. I surely look forward for your posts though I am running behind to read them…
Thanks for the help.
Abhay
Thank you Abhay! I agree to both your comparisons 🙂
I too continue to hold. With the lid off in the 2G scam, the competitive scenario for telco’s (telecom cos.) has become intense. Eralier it was more of controlled competition (6 to 7 players). Now it is anyone and everyone. Market competition is without doubt much more. Yes their service, products are good thereby driving increase in no. of customers. From a branded service, teelcom has become a commodity and therein is the challenge.
I second your opinion Sudhir.
A very relevant and apt post. There are so many complex biases, so much of chemical locha, that at times I think it is impossible to get rid of all the biases in your decision making. It requires a very fine delicate balance to avoid all these biases. Just lean a little bit here and there and you get accused of one bias or another. 😛
Had Bharti in my portfolio for few years. Bought at 46 (92 pre bonus) and sold at 418 on 5.8.2011. The reason was that I required money somehere else. On hind sight, it seemed a very good point to get out. A few points aided my decision; One I had got good profit over a holding of 7-8 years (about 31.5% cagr) and didnot foresee the same growth in years to come as I was seeing even Rs.3500/- salaried labour having 2 sim mobiles, their venture into retail was not sure to be diversification or di-worseification, their entry into long gestation loss making insurance business etc, all talks of 3G and VAS not taking off well (even now there is not much of 3G business) and the likes.
You are right Vishal. Accepting your faults/biases openly kind of forces you to think positively and try to get rid of your biases. As you had pointed out in the workshop, the biggest enemy of an investor is he himself. Instead of taking an objective, dispassionate view, we often succumb to our emotions and that plays havoc with our judgement.
A very nice post, superbly written, as always…. 😀
So you are already a “Safal Niveshak”, Sanjeev 🙂 Thanks anyways for sharing your views on Bharti.
While you were buying Bharti, I must be fooling around somewhere! 🙂
That was not by design Vishal, but by Luck and what Mr. Chandrashekhar puts as Gut Feel. I didnot know even the I of Investing at that point. (I am not sure even now 😉 ) but atleast now I look at some data before entering.
Another recent gut feel investment is symphony which I discussed with you if you remember. Was not sure about the numbers but went after it with my sin money. I don’t know what has happened but I have got 90% returns in 3 months. 😛
As I wrote in one of the posts those who have specific goals most likely end up making money on the stock markets.
Wow Sanjeev! As we discussed in the Workshop, luck (like love) is a verb. You need to practice – do the hard work – to get lucky in life (being lucky is in itself a great “symphony”) :-).
Also, as Sudhir just added – one who has specific goals most likely ends up making money on the stock markets.
So great going!
A very nice post Vishal. I really liked the Anchoring Bias part.
I don’t know if Bharti would turn out to be a good or a bad bet in future, but what I feel is that may be, I repeat, may be, the telecom sector is turning into a sort of utility sector. It may not be able to command high multiples that it was able to in recent past. A typical utility generally commands a PE of around 8-10, so a potential re-rating might be an interesting scenario to think about.
But there have been occasions when boring utilities have also turned out to be multibaggers in the past 🙂
So best of luck with Bharti.
Thanks for the interesting idea, Dev!
I agree with Vishal, Dev. This is very interesting perspective which didnot cross my mind. Thanks for bringing out another view.
This is what makes SN so special… 😀
Hi Vishal
First a disclosure: I sold Bharti in May for 294 reinvested in J & K Bank!
What I found interesting in J & K- Strong balance sheet. Low cost of deposits-being a monopoly player in J & K., Reduction in NPA, improvement in the econ situation and attractive div yield, not to speak of cheap valuations.
You have covered an important topic which every investor would have come across during his investment lifetime- In my case many times.
What I have done in the past mirrors what one should do:
1. Initial stock selection was wrong-sold and booked the loss.
2. Strong conviction in the stock- buy more or do nothing. More often I have done the latter. ex: Tata Motors which I had picked at Rs 200,
came down to 50 Rs when they reported a loss of 500 Crores after the launch of Indica . Please note FV 10!!! Its another story that I sold much later!
3. Opportunity trade off: book the loss and invest in a better stock.
As they say, investment is both an art and science. At times Gut and feel have yielded better returns than when I went purely by numbers.
Again there are no right or wrong answers. One could give as many reasons for hold/buy or sell at this point in time for Bharti! I have had my reasons for selling just like you have for holding.
Best of luck to Bharti and Vishal!
( Time in the market more important than timing- as the saying goes.
(More time you spend with bharti, the better you are off!!)
Great lessons as always! Thank you Mr. Chandrashekar for sharing.
Hi Vishal,
Can you have an article on the intrinsic value calculation of Airtel.
I did it myself but am not able to factor in the current auction cost into it. Your inputs would be valuable.
Thanks You!
Here’s that article, Saket –
“My IV calculation for Bharti suggests a figure of Rs 250 for the stock based on Graham number, average P/E valuation, EPV, and a margin of safety of 25%. But I won’t be able to quantify my “gut value” for the stock.”
🙂
But as Aswath Damodaran will say, this valuation is “biased”, plus it will be “proven wrong”. 🙂
It is not in the Research section. Seems some place else or you have jus replied to the query.
Sudhir, I just replied to the query 🙂
Good article Vishal..
Overflowing with so many Case Studies..Well thats what makes learning better..:)
Hi Vishal and Tribesmen
Good Evening to you all,
Knew it all along(Hindsight Bias)……hahahah
I was expecting this post sooner or later.I am also a stakeholder in this company.Bought into this company on 23-Aug-10 at 5% additional to you cost i.e 315.
Overconfidence Bias…..
Stock reaching 417 within an year and giving an absolute return of 32% in just one year and that too a large cap,Reni you are great at picking up stock before its moving into higher trajectory(Self Congratulations).
Date:10-Aug-12
After an year of overconfidence bias,back to square one.Now staring into an annualized loss of around 9%.Emotions are part of Human Behavior in whatever field you take part,if emotions are not a part of decision taking then the resultant factor would be unsatisfactory.All the relevant biases are mentioned by vishal in this post.The point here is whether Bharti Airtel its worth holding and pondered upon in the coming period to become or remain a part of the core portfolio.Now if i can add anything new or worthwhile to this post then it could be great.
Future of mobile telecom in india….
Do we expect any other type of communication structure to take place of mobile communication in the next 10 or 20 years the way mobile took place of pager,well pager had its deficiencies. I do not think so,later on we may insert a chip into the our body and can directly connect to another body without any instrument(Scicence has limitless boundaries–A paradoxical statement),but then also a carrier would be needed.These may take years to be viable or may not be viable at all also.So till then this is going to remain a mode of communication and that too a large one for a long period of time,I assume.
Sector Leader
If i take the sector leader, it is Bharti that would come to my mind,Reliance Communications with the second spot will not cross my mind due its promoter and management pedigree and a hopeless loop created business.So Bharti with its pan-India presence would be an obvious choice,if iam still interested in the sector.
Government Regulation…
So government regulations have tightened ,they have found a cash cow in the telecom sector which they are milking,whenever they are in need of milk(Money),due to the huge fiscal deficit they are staring at.Governments change and so do regulations.
Contrarion Thought…..
Right now everybody -are hell bent on writing the obituary for Bharti Airtel,rewind back to 2008-09,obituary was written all around for all the stock markets of the world.Well markets never die,its just the faces that are in the market that change.Now the target for Bharti Airtel on everybody’s radar would look something like this 260,230, and if 200 breaks then 170,130 and might be 0 also,no one is talking about more than 300 which was the case just an year back.
Infrastructure…..
It’s not easy to set up a mobile infrastructure and that too pan-India,any new company after winning the license,decides to set up a new infrastructure in line with Bharti Airtel would not make any profits for the next 10 to 12 years,you need a war chest of money to do this,except reliance industries you would not find anyone with that capacity and also sit down for such a long time without any profit being generated.
Consolidation…..
You will find consolidation in this sector also,world over in each country there are 3 to 4 players in this sector, it is bound to happen in india also.I hope your guess is same as mine that who will survive and who those 3 or 4 players will be.
Some of the cons:
Would like to see,what will reliance do with its 4g ,bwa license,would it become a game changer and would adversely impact the bottom line and top line of 2g and 3g players?
Other points are the same as vishal as mentioned.
Ques: So what is the outcome that i have derived from vishal’s post and my own assessment of Bharti?
Ans:I will hold on to my holding and and may add further in the future also, I would also like that all the analysts(the so called brilliant people),the press(The Know er of all things) continue writing bad things about bharti,it depress the price more and then i will be able to cherry pick at my rate sooner than later.
Till then let the show go on……Bharti Airtel might be saying(Hum abhi zinda hai aur kuch shayroo(Analyst) ne humaare maut ke afsaane likh diye….
Thanks and Regards
Happy Investing
Reni George
Great discussion, thanks all of you.
While I’ve not done a detailed financial analysis, on a business future point of view, i want to present my views:
1. Voice communication will (or probably already has) become utility service, and all carriers will just make enough money from it to sustain
2. However, data will lead the way forward. I can see young people around who’re always chatting, browsing, facebooking…some of them choose to buy a “tab” like ipad instead of a normal phone for this! I know this is still a very small %age now, but it’ll grow…
3. We in VLSI industry see the trend changing very early…in 2008, we were designing cellular chips which had HSDPA and other high end data protocols, now these chips are making way into phones…and other devices…the VLSI industry turnaround time is large…it takes over 10 years for the revenues to start coming from end product after the “raw material” starts being designed…moreover, its only been 3 years or so that iPhone came to India, and only about 1-2 years that 3G phones are affordable to masses…now that a large number of people have access to technology, they’ll start using it…slowly…
4. The data usage will grow steadily, also because of increased social networking, e-commerce, convenience of online shopping, music, videos etc…more and more services and “devices” are getting connected, and all of them will consume a lot of data
5. Now, the only problem is – how to “value” all these things…probably only the middle and higher class in India will generate cash profits from data usage…but that could be large…we can expect a TAM of ~300M users by 2020 (at current population of 1.3B and 2% growth rate, at least 20% population will fit into middle and upper class)…even if 50% of them actually use data services, its 150M users, and assuming data packs will generate fixed income of say Rs 300 pm, it gets us to about 54000 crores annual revenue from data alone for the industry by 2020. Assuming Bharti has 30% of the share, it gives us Rs 18000 crores / 380 crores (current shares outstanding), i.e. about Rs. 50 per share of revenue from data
6. Now the interesting part – my company, Freescale semiconductor is one of the biggest players in cellular infrastructure chips, and we hear that customers want infrastructure cost to go down, and at the same time, have longer lifetimes…while its bad for us, its good for cellular infrastructure – all the money bharti has spent, will pay in long run, since their operating profits will improve – the more the deployed network is used, the better the returns, and I think assuming a 30% operating margin should not be too optimistic in 2020…that gives as a cash earning of Rs 15 per share from data.
Now, I’m stuck….this is for year 2020 – how can this translate into “present value”…and then again…how wrong can the above analysis be…margin of safety etc…if someone on forum can help criticize / expand this analysis…we may be able to find a good value for the “assets” of bharti, which are much more valuable today than their earnings…since these network assets will actually generate most of future earnings…
Let’s hope to get some good valuation discussion here on, contuining the already superb discussions on biases 🙂
Dear Sunny
That was great of you to provide some more insight into the sector.I would like to ask certain questions regarding your input just to clarify some doubts.
1)The Expected Revenue generation has been adjusted for inflation or is it based on the current rate.
2)What do you expect the cellular infrastructure life going forward.
3)What is your future expectation from 4g and BWA?
Thanks and Regards
Happy Investing
Reni George
Thanks Reni
1. I just estimated revenue generation in year 2020, and hence I asked how to find its NPV today…my analysis above says Rs. 50 / share of data revenue in year 2020 for Bharti – with other assumptions of only 10% of Indian population generating an average Rs 300 (in 2020) per month data revenue, and Bharti having 30% of this market share
2. Cellular infrastructure life will actually improve, or at least stay constant – earlier there were “cells”, with towers separated every 1km or so, and the latest is “pico-cells” and “femto-cells” – like human brain…each neuron doing “nano-work” and billions together doing mammoth work…so, since each cell has to do small work, its small, needs lesser care, lesser power…and such a system is more efficient…and hence real depreciation and re-investment lesser
3. Well, I’m not so sure…as a user, I can today manage with 2G, but do find it slow to read news (I only do emails, news and very occasional facebook), if I represent average user, migrating to 3G should be more than enough for me…so, as we perceive the world today, I don’t think 4G will have a huge market…unless my perception is wrong and people do spend a lot of bandwidth on videos…which can explain why Youtube is thriving in India…so, there’s both thought processes…
3. On wireless broadband, yes, I forgot about it! Airtel is probably the biggest and best player in homes and offices for broadband services…not sure why people would want to migrate to wireless broadband or WiMax…but then, WiMax, if accepted, will reduce maintenance cost and deployment cost, and will drive the next stage of growth for broadband usage in remotest of areas…
However, all of them will contribute to growth in data consumption, and that’s the future for Airtel, which is well positioned with its assets in network infrastructure…
the worries are – will they de-focus and start diworsification? can govt become more greedy and pose even high spectrum fee that’ll severely hit bottomline? will this sector open for FDI and cause even further competition…? will reliance (RIL) do something nasty and cause long term damage to the sector in quest of gaining market share?
Vishal,
You have been brave to expose your inner self in order to educate us in handling ours. I have suffered much due to these biases and i kept remembering all the mistakes i have made in the past.
I am going to read your article again in order to imbibe it as a mirror to myself.
I can’t thank you enough.
Sam
Good article! Whats happening with Opto Circuits? Similar feeling, but not sure if we are something there!
You may also like to see the stake of Sunil Mittal and the dividend history of the company. Many argue with me that Bharti is in the telecom business which is in growth phase and they want to retain money for growth. Really? If so I can sight several other cases which could counter this argument. Paying dividend shows the mentality and quality of the management. If they are investor savvy? Look at L&T. It is paying dividend from the time of its inception. It shows the commitment towards shareholders investment. Also if you look management holding and dividend history you realize that they go, hand in hand, many a times… My message avoid Bharti.
Hi Bharti @ 258….Ahmm…plan to invest….
At the most optimistic scenario Bharati would return 10 CAGR over the next 5 years.Reasons are:
1.Bharati has been a net destroyer of shareholders wealth in last 2-3 years.It would take many years to correct these mistakes.
2.Telecom industry fundamentals are not going to change for the better in next few years.
3.Huge debt is going to suck away most of the shareholder earnings.
The only positive trigger that could come up is some kind of regulatory decision which leads to wiping of a few of existing players thereby giving pricing power to Bharati.This kind of a scenario is highly unlikely in the next few years.
Its important to consider the opportunity costs involved if one decides to hold such kind of a business for the long term.
Thanks for your invaluable inputs, Rakesh!