Bharti Airtel Ltd.

 

(BSE: 532454 | NSE: BHARTIARTL | ISIN: INE397D01016)

 

CMP Rs. 838 (10/08/2007) 52 Week Highs Rs. 948.00 Lows Rs. 346.10 

Future bodes well for select sectors in India. This is our conclusion after studying macro economic trends. World perception of India is also changing. Recent TV series "India Ignored to India Idolized" on BBC by famed documentarian Michael Wood is a classic example how the perception is changing.

Infosys has upped its FY08 guidance and reported profit increase of 18% for the past quarter. What is the real story?

SENSEX crossed 18,000 mark in just eight sessions. Thanks for Reliance Energy, Bharti Airtel, BHEL, ICICI and other companies. Where is SENSEX headed? Where do you think it will end by the end of the year. All the macro economic indicators are looking good. Interestingly, the rupee is strengthening against the dollar at the same time the stock market is on a meteoric rise! While European Union is sending their ambassador to China to make yuan more free, no such conversation is required with the Reserve Bank of India which refuses to intervene as the rupee rises.

India's foreign exchange reserves added $11.8 billion during the week ending on September 28,2007. The foreign exchange reserves now stand at $247.762 billion. This is a new high. At this rate, India may add over $100 billion to its foreign exchange reserves for 2007.

In the preceding article, we selected ten major areas of focus which would determine India's progress over next several years. This article provides you with the rationale behind the choice of each of these major areas.

Policy: Government policy has played major role in determining economic progress in India. Over last sixty years after India's independence, the country has progressed and regressed depending on government policies. Since 1991 when India got a wake-up call after its foreign exchange reserves dipped to all time low of $1.92 Billion, Indian government has moved in the right direction. Another complexity that plays important role in this area is the role of the state governments besides what the central (federal) government policies are.

The news coming out of India as regards its economic development has been positive for past two years or more.The economic indicators look impressive compared to what they used to be before. Various comparisons are being made between India and China. Economists have been busy playing out projections over next ten, fifteen and even forty years. It is not too difficult to find articles published in reputed international magazines which suggest that India and China are going to be two economic superpowers by 2050. Behind these projections are plenty of assumptions. Many people believe that the process of economic development is irreversible. The current rate of GDP growth of 9.4% looks very attractive. Implicitly people believe that this GDP growth rate will be in that ball park for years to come.

There is of course more reason to be skeptical of many of these projections. Those who know India are well aware of the pitfalls. As much as one wishes that the projections come true, there is a feeling of apprehension that lot could go wrong. Would India stumble? Does India have the ability to sustain the economic development for next two decades or more? What possibly could go wrong? While India charts its course towards economic development, other countries are not keeping quite either. There is plenty of interdependence between India and what happens on the global economic front. Not too much in distant past we had seen the Asian Tigers sprint way ahead of India and China.

Believe it or not, we are in the midst of the greatest economic boom ever! The world is changing right in front of our eyes. Economic balance is undergoing a major shift. Debtor nations are turning into lender nations whereas the traditional lender nations are surviving on capital investment from nations running current account surplus. The world GDP is growing at an unprecedented rate of 5% annually. This is the highest growth rate recorded since the sixties! Not to mention that the world is ushering in more households into middle class than ever before resulting in tremendous demand for consumer goods.

 

More economic development continues in India. Number of official millionaires in India increase to new levels. Mumbai is now evolving into a hot market for yachts! Interestingly, India businesses are now on the prowl to acquire businesses in the developed world. Robyn Meredith has published an interesting book titled - The Elephant and the Dragon.

 

These and other snippets from India are in this article.