 "Bharti ahead of Sun Pharma on market cap")
Bharti Group has become India's fourth biggest corporate house among privately owned businesses by market capitalisation, surpassing Sun Pharma Group and closing in on Mukesh Ambani-controlled Reliance Group.
With a total market-cap of Rs 2,55,831 crore, Sunil Bharti Mittal-promoted Bharti Group is behind Reliance, the number three with Rs 3,03,739 crore in m-cap. Both Bharti and Sun Pharma Group have two listed companies each under their fold: Bharti Airtel and Bharti Infrastructure, and Sun Pharmaceutical Industries and Sun Pharma Advanced Research (Sparc). In 2015, Bharti Group has already overtaken Aditya Vikram Birla Group and ICICI Group in overall business house m-cap ranking.
Tata Group tops the list, with a market cap of Rs 8,14,107 crore of its 30-listed companies, while HDFC Group is second with an m-cap of Rs 4,64,873 crore. The m-cap of these groups has been derived after taking into account market values of all their listed companies as on Monday.
Analysts say Bharti’s core business remains on a strong footing and has been the key driver behind the group’s stock performance.
Explains Vinay Khattar, associate director and head of research at Edelweiss: “There are a few positives playing out for the telecom sector and the company as well. There is a feeling that the competitive pricing phase that was playing out from many years is behind us. As a result, average revenues per user (ARPUs) will start to move up. There has been a significant improvement in data usage by consumers, also a positive for the company.”
Khattar also believes monetisation of non-core assets for Bharti Airtel is the next big thing for the group. “The company plans to stay away from its non-core businesses like retail. So divestment in the non-core businesses and an improvement in the core business are having a positive impact,” he says.
Thus far in 2015, Bharti Infratel has surged 40 per cent, while Bharti Airtel, the group’s flagship company, has gained 18 per cent compared with the S&P BSE Sensex’s 1.28 per cent rise. Bharti Airtel touched a 52-week high of Rs 435 a share, while Bharti Infratel hit a lifetime high of Rs 505 during intra-day trade on last Friday.
U R Bhat, managing director, Dalton Capital Advisors, says: “Bharti Group has been doing excellent although their foray into Africa hasn’t started yielding much. They certainly have a global ambition. Their other businesses, too, like retail haven’t done very well. However, the core business remains on a strong footing.”
Results impact
Sun Pharma, on the other hand, has lost nine per cent after the company’s net profit fell 44 per cent year-on-year to Rs 888 crore for the fourth quarter ended March, because of the Ranbaxy acquisition. Sparc, the other group company, too, dropped three per cent to Rs 400 on BSE on Monday.
Dilip Shanghvi, managing director of Sun Pharma has attributed the stock slide to one-time charges, mainly on account of the Ranbaxy merger and price erosion for some of its products in the US. “It also reflects the impact of supply constraints related to the ongoing remediation efforts at some of our facilities,” he had said earlier.
After the recent results, analysts have trimmed their near-term growth forecasts for Sun Pharma, though they remain optimistic on the prospects of the company in the long term.
Bank of America Merill Lynch, for instance, slashed its target price for Sun Pharma to Rs 1,063 from Rs 1,100 and maintained a ‘neutral’ rating. It also trimmed the company’s 2016-17 earnings per share estimate by six to four per cent on the Ranbaxy consolidation.
Karik Mehta, an analyst with ICICI Securities tracking the company, believes the weakness in earnings growth due to integration of Ranbaxy's operations is temporary.
"We downgrade Sun Pharma to 'hold' from ‘buy’ with a revised sum-of-the-parts-based target price of Rs 921 a share. The key upside risks to our view are better than expected operational performance by Taro, faster than expected visibilities of synergies after the integration of Ranbaxy's operations and assets, and earlier than expected normalcy of production at the Halol [Gujarat] plant," he said.
With a total market-cap of Rs 2,55,831 crore, Sunil Bharti Mittal-promoted Bharti Group is behind Reliance, the number three with Rs 3,03,739 crore in m-cap. Both Bharti and Sun Pharma Group have two listed companies each under their fold: Bharti Airtel and Bharti Infrastructure, and Sun Pharmaceutical Industries and Sun Pharma Advanced Research (Sparc). In 2015, Bharti Group has already overtaken Aditya Vikram Birla Group and ICICI Group in overall business house m-cap ranking.
Tata Group tops the list, with a market cap of Rs 8,14,107 crore of its 30-listed companies, while HDFC Group is second with an m-cap of Rs 4,64,873 crore. The m-cap of these groups has been derived after taking into account market values of all their listed companies as on Monday.
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Core business
Analysts say Bharti’s core business remains on a strong footing and has been the key driver behind the group’s stock performance.
Explains Vinay Khattar, associate director and head of research at Edelweiss: “There are a few positives playing out for the telecom sector and the company as well. There is a feeling that the competitive pricing phase that was playing out from many years is behind us. As a result, average revenues per user (ARPUs) will start to move up. There has been a significant improvement in data usage by consumers, also a positive for the company.”
Khattar also believes monetisation of non-core assets for Bharti Airtel is the next big thing for the group. “The company plans to stay away from its non-core businesses like retail. So divestment in the non-core businesses and an improvement in the core business are having a positive impact,” he says.
Thus far in 2015, Bharti Infratel has surged 40 per cent, while Bharti Airtel, the group’s flagship company, has gained 18 per cent compared with the S&P BSE Sensex’s 1.28 per cent rise. Bharti Airtel touched a 52-week high of Rs 435 a share, while Bharti Infratel hit a lifetime high of Rs 505 during intra-day trade on last Friday.
U R Bhat, managing director, Dalton Capital Advisors, says: “Bharti Group has been doing excellent although their foray into Africa hasn’t started yielding much. They certainly have a global ambition. Their other businesses, too, like retail haven’t done very well. However, the core business remains on a strong footing.”
Results impact
Sun Pharma, on the other hand, has lost nine per cent after the company’s net profit fell 44 per cent year-on-year to Rs 888 crore for the fourth quarter ended March, because of the Ranbaxy acquisition. Sparc, the other group company, too, dropped three per cent to Rs 400 on BSE on Monday.
Dilip Shanghvi, managing director of Sun Pharma has attributed the stock slide to one-time charges, mainly on account of the Ranbaxy merger and price erosion for some of its products in the US. “It also reflects the impact of supply constraints related to the ongoing remediation efforts at some of our facilities,” he had said earlier.
After the recent results, analysts have trimmed their near-term growth forecasts for Sun Pharma, though they remain optimistic on the prospects of the company in the long term.
Bank of America Merill Lynch, for instance, slashed its target price for Sun Pharma to Rs 1,063 from Rs 1,100 and maintained a ‘neutral’ rating. It also trimmed the company’s 2016-17 earnings per share estimate by six to four per cent on the Ranbaxy consolidation.
Karik Mehta, an analyst with ICICI Securities tracking the company, believes the weakness in earnings growth due to integration of Ranbaxy's operations is temporary.
"We downgrade Sun Pharma to 'hold' from ‘buy’ with a revised sum-of-the-parts-based target price of Rs 921 a share. The key upside risks to our view are better than expected operational performance by Taro, faster than expected visibilities of synergies after the integration of Ranbaxy's operations and assets, and earlier than expected normalcy of production at the Halol [Gujarat] plant," he said.