- Stock should be bought in your portfolio in ‘penny stock’ category
- Stock holding duration can be 5-10 years.
- Target of the stock price is 50-100 rupees in next 5 years and thereafter as per the then prevailing condition about telecom sector and the company in specific.
- There is little to lose by investing rupees 5-10k shares and a lot to gain.
- This stock fits in a classic buy category of penny stocks and potentially ‘once in a lifetime’ kind of investment idea that comes in investing life cycle.
- Telecom sector has matured and in developed markets also there remains 3 big players at the end of the growth cycle and beginning of matured profitability cycle.
- All the 3 players namely, Reliance Jio, Bharti Airtel, and Vodafone Idea have about equal market share wiz. 35 crores around, which is very huge.
- At this time it is highly unlikely that there can be any M & A activity between them.
- 35 crore user base is very huge and a small margin of profit can also reduce debts considerably and make this company profitable in few quarters only. Once debt free it can fetch tremendous valuation as the 35 crore user base will offer immense profit potential over the period of future.
- The parent company Vodafone Plc is a very old global telecome conglomerate having operations in many countries and looks unlikely that they will liquidate their operations in a lucrative market such as India after all they have faced and especially now when the Indian telecom market has matured and in some time to become profitable (in gross terms) to all operators and the tariff war also has ended.
- Looking at about point it does not look very tough for an MNC like Vodafone to raise few billions of dollars fund if it has to require for its operation in India.
- The disruptor Reliance Jio has already announced it will charge IUC which will be income to the Airtel and Vodafone Idea as well as it will start charging the users slowly and eventually as per its plans, so that is a relief for both Airtel and Vodafone Idea as they can also start charging.
Looking at above arguments, we strongly recommend to put some money in this stock at present price.
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