Banners for Reliance Jio, the mobile network of Reliance Industries Ltd., top left, and Bharti Airtel Ltd. hang outside a mobile phone store in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Watch Out For The Telecom Sector, Says Carnelian Capital

The telecom industry could emerge as a contrarian bet, according to Vikas Khemani.

The industry has consolidated, and it’s a three-player market, Khemani, who is the founder of Carnelian Capital told BloombergQuint in an interaction, adding that while he is still evaluating his stance, the sector is a must watch.

“Jio has reached a critical mass, so at some point in time, increase in ARPU (average revenue per user) might play out. And being a very high operating leverage play, some of the telecom players like Bharti (Airtel) could end up doing well,” he added.

Consensus Call

Khemani agreed with the consensus perspective on the financials market and said, “In the next four to five years, banks [would be] much better placed than any other set up in the banking, financial services and insurance space.”

This market rally will be led and sustained by financials, and banks form a very big part of that basket.
Vikas Khemani, Founder, Carnelian Capital Advisors

Khemani further advised people to remain invested in the banking sector. “[Banking] sector has a long way to go.”

Market Perspective

Despite the increased market volatility, Khemani said he is confident that India is well-placed from a medium- to long-term perspective. “Things are under control,” he said, adding that volatility arising due to rising oil prices is a temporary situation.

  • Uncertainty over Indian election would be over with by the next month
  • Inflation is in control
  • Global cues are favourable for India
  • Market corrections should be looked as opportunity
  • Markets are not overly expensive
  • Should avoid taking leveraged position in the market

Watch the full interview here: