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In today’s issue, we discuss;

• Jio leads an active wireless subscriber base, though Bharti leads the pack with the highest VLR %.
• United Spirits (UNSP) gave a breakout above its main (5-6year) resistance level.
• HDFC looking for a massive rural push
• And an educational concept to widen your horizon (not saying otherwise 🙈)  Read along!

Patel Engineering: 17.90 | +1.35 (+8.16%)

• The stock jumped over 8% after the firm bagged a Rs 1,251 crore Lot II Civil Work contract for the 500 MW Teesta-VI hydroelectric project in Sikkim

United Breweries: 1555.55 | -50.30 (-3.13%)

• The script slumped over 3% after CCI penalized United Breweries India and Carlsberg India for cartelization

Telecom Subscription Numbers: What do the latest monthly numbers indicate about the industry and which players should you track? 🧐

Industry Update

• After two consecutive months of decline, the industry’s VLR (Visitor Location Register) expanded by 4.6 mn in July
• What is VLR?
  • VLR is a database that houses information about the subscribers who have roamed within a mobile switching center’s location area;
  • the VLR register determines access of a particular service to a user and deletes records of inactive users (giving a more complete picture, in comparison to total customer count, that will contain inactive users as well)
• The industry’s total subscriber base increased by 6 Mn (more than one sim, dormant sims), with Jio & Bharti accounting for a majority of the growth
• Bharti leads the pack with the highest VLR %, with Jio recording the lowest % in the three-player market (see image below)

Company-Specific? What is the VLR & Subscriber count company wise? How many did VIL lose? (:PP)  😏

Bharti Airtel

• Total & VLR subscriber base grew by 1.9 Mn & 2.3 Mn respectively, with the company returning to VLR additions outpacing Total Subscriber additions (after a span of 2 months), which augurs very well in terms of quality of customer
• The company added 4.5 Mn wireless subscribers, with the wireless subscriber base as a proportion of the overall subscriber count increasing by ~1%

VIL

• Although the company lost subscribers (total & VLR), the pace of decline decreased, with a drop of 1.4 Mn & 3.3 Mn subscribers lesser in comparison to preceding months
• Recent telecom package is likely to positively impact the company, with a fund-raise and continuous investment in data network bound to help the company restrict current subscriber loss

Reliance Jio

• Total & VLR subscriber base grew by 6.5 Mn & 6.1 Mn respectively, although the VLR % for India’s largest telecom player continued to remain weak at 78% (see image below)
• Circle wise (classified as regions the company’s services are present in), grew to include VLRs in 18 new circles, with Maharashtra, Telangana, Gujarat, TN, AP posting sizeable increases
• The company added 0.3 MN new wired broadband subscribers, maintaining strong traction in this space

Interesting! Final thoughts? 🤔

• Bharti Airtel continues to add active subscribers, on the higher end of the pay-scale; in comparison, Jio seems focused on increasing total subscriber count, with the next step in monetization likely through Google-branded smartphone (priced at INR 5000)
• Initial struggles for VIL prima facie look to have abated (for now), with the telecom package likely to ensure the market does not morph into a duopoly (anytime soon)

We have covered Bharti Airtel in detail in previous issues. Check them out below –

1. Rights Issue Announcement 
2. Quarter Results

United Spirits (UNSP) up 11% in the last 5 days? What’s been up? 🤩

• Analysing United Spirits on a monthly time-frame (over 50 months) indicates that the stock just gave a breakout above its main (5-6 year) resistance level
• The share had been trading below its multi year resistance (803) and has finally closed above this level, indicative a clear case of consolidation and breakout; multi year consolidations usually lead to big rallies like we observed in Indian Hotels Ltd last week
• In the past 6 months the stock has been trading in a strong uptrend, with prices taking support on a rising trendlines (making higher lows), shown with the help of arrows in the image below
• What a rising trendline? As marked on the chart, its a line connecting a set of points where the price changed short term trends (in this case from downtrend to uptrend)

That’s great!! What other price action/patterns can give us confirmations?🧐

• Initially, we looked at UNSP on a monthly time frame, trying to ascertain the trend the stock is making; we now look at the stock on a weekly time frame, to get a second confirmation and avoid any traps
• On a weekly time-frame, initially the stock broke the level of 776 (above the higher levels of the inside bar)  which led to the prices breaking the multiyear resistance (803)
• How did the stock get such momentum and what’s an inside bar? (See image below)
  • An inside bar is a popular continuation candle formation where the children candles trade within the parent candle, which usually acts as a pause in trend (consolidation).
  • In this case, the prices were in an uptrend before the halt, hence you should look for a breakout on the higher side, for the trend to continue
• This pattern is a direct play on short-term market sentiment looking to enter before the ‘big moves’ that may take place, and can be traded using the master candles strategy (breakout strategy)

So should we keep track?🧐

• The breakout above the inside bar led to a breakout above the multiyear resistance, giving us a clearer picture on the stock while safeguarding us against possible traps
• Finding multiple confirmations while performing technical analysis on a chart is important and helps avoid traps, while notifying us about any upcoming trades
• We started on a monthly time-frame with overall price action (consolidation and breakout) and trend analysis and took second confirmation on a weekly time-frame (inside bar breakout)

What else caught our eye? 👀

HDFC looking for a massive rural push

• HDFC is looking to expand its reach to 2,00,000 villages (double its current volume of 1L villages) in the next 18-24 months
• This they will achieve through opening physical branches, hiring business correspondents, and increasing their digital outreach.
• The lender is also offering rural-specific offerings like post-harvest crop loans, and two-wheeler and auto loans.

Yamaha testing the waters for the EV market

• Yamaha does not want to commit to entering the Indian EV market until evaluating the development factors such as charging infrastructure and battery production.
• They also acknowledge that the success of the venture is dependant on the consumer’s acceptance at large
• Though the top management is appreciative of the government’s support in the regard, they believe there are bigger challenges to look into

FPIs can’t get enough of India

• FPIs have been net buyers so far in September with an investment of ~ 21k crore. (14k cr in equity and the remaining in debt)
• The rally in the equity market + positive long term outlook + better than expected corporate earnings are thought to me major reasons along with an overall economic recovery!