Wednesday, November 1, 2017

Will Idea cellular be next RCom


Some fundamental Analysis before we jump in to any conclusion

Pros
Good network

Cons
Company has low interest coverage ratio
Company has low return on equity of 7.11% for last 3 years
Contingent Liabilities 55053 crores
Cashflow negative -613 crores
Profit Growth is -197.46%


Idea today moved around 7% as Bharti Airtel posted not very bad numbers but with Idea there is no chance the results will be bad and is expected to deliver a loss of -500 crores most of the profit will be used in paying interest on liabilities.

The stock again closed below resistance of 100 and selling in last 30 mins clearly showed weakness. 

The results will be much bad qoq basis last quarter the loss was just -61 cr and could be -500 cr the tower sale would just reduce the debt by 6000 crore still outstanding debt of 49000 crore could be next RCom in making

Reality Check

How many of your friends or family who used Idea continue to use it ?

It is providing a great opportunity to short or use bear put spread option strategy

Happy Investing !!!!
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