Thread by @stocktalk_in

⚠️ VODAFONE IDEA

For the past few days we’ve been doing a lot of research on the telecom companies.

1️⃣ Reliance Jio

2️⃣ Bharti Airtel

3️⃣ Vodafone Idea

Lot’s of not so good points about Vodafone Idea.

Retail investors usually don’t like to hear critical views.

Share or not?

Alright, so it looks like a lot of us are willing to learn more about Idea.

So here’s what we’ll do;

Instead of just sharing the data one-way, we’ll make it an interactive session dedicated to #VodafoneIdea

This way we all can do our own research and collectively learn from it

Before we start, let's clear some things;

🔸 This is NOT a buy / sell recommendation.

🔸 This is NOT technical analysis / price action analysis.

🔸 This is NOT meant to spread any negative sentiment.

Feel free to analyze the data on your own and take your own decision.

There are 3 telecom companies in India - Jio, Airtel & Idea.

#RelianceJio is a relatively new company & is not affected a lot by AGR.

Also it is not independently listed on the markets and is backed by Reliance. They have recently raised almost ₹1 lakh crore & are cash flush.

#Airtel and #VodafoneIdea would be a fair comparison as both the companies have been in the market for quite some time and have faced the same economic events.

This will be a purely fundamental comparison of the companies.

Now let's start with the basics;

Like said before, this will be an interactive session to make sure that you do participate in the research so that you can believe the facts.

1) What is the institutional holding of the telcos?

2) What is the equity size and debt size?

3) What is operating profit and net profit of the company for the last 8 quarters?

4) What is the EPS of the company?

5) What is the P/E of the company?

6) What is the CAGR (%) returns of the company for the last 3, 5 and 10 years?

7) What is the interest coverage ratio of the company?

8) What is the ROE % and ROCE % of the company?

You will get answer to these questions by doing a basic Google search or referring the company website.

Try to understand those numbers if your really want to understand it.

Vodafone Idea has a huge sum (₹53K Cr) to pay in terms of AGR dues.

The company either needs to start raising capital fast or the parent company Vodafone UK needs to step in and infuse capital.

Reliance Jio has raised ₹1 lakh crore and Airtel has raised ₹7,000 crore.

The above 8 questions are the very basics of analyzing a company.

There are advanced methods like discounted cash flow valuation, etc. that digs deeper in the company's financial position to estimate the future valuation.

But for now these 8 questions should give a fair idea.

If Vodafone Idea is able to bring onboard a reputed institutional investor who will put in the required capital then it will be a different story.

It will show institutional confidence in the company which is currently more necessary than the capital itself.