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    Buy Bharti Airtel if it falls further, look into telecom ancillaries: Sandip Sabharwal

    Synopsis

    "Bharti has been stuck around at a certain level for a long time and it did not correct in the market correction also. I do not know who takes these brokerage downgrades seriously but it could be because of general profit taking. If the stocks come down further, I would be more of a buyer than looking to get out of them."

    Use market correction to buy the stocks you like: Sandip SabharwalETMarkets.com
    “It always happens in the utility industry that the equipment suppliers or the people who set up the networks, provide software, etc, tend to do better because they are not taking the risk of the entire business which is heavily capital intensive,” says Sandip Sabharwal, asksandipsabharwal.com

    A lot of concerns are now flagged by a couple of brokerages on whether or not the 5G rollout is going to be more pain or gain for the telecom companies. What is your view?
    I think the big issue with telecom always has been that there is a need of continuous capital expenditure and that does not go away but given that it is becoming more of a duopoly now with Vodafone (Vi) losing customers by leaps and bounds, the slack has been taken away by Airtel and Reliance.

    The probability that the story will do decently well over the long run is high. Bharti has been stuck around at a certain level for a long time and it did not correct in the market correction also. I do not know who takes these brokerage downgrades seriously but it could be because of general profit taking.

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    If the stocks come down further, I would be more of a buyer than looking to get out of them.

    When we look at 5G, we wonder which telecom company will have maximum gains in terms of taking the ARPUs higher. Now the terrain is that price hike is not going to be huge but when the 5G rollout is happening, there would be an equipment requirement and there are companies which would benefit largely because of this 5G rollout. Does it make sense to follow this pick and shovels model and bet on the second and the third derivative companies?
    Yes. It always happens in the utility industry that the equipment suppliers or the people who set up the networks, provide software, etc, tend to do better because they are not taking the risk of the entire business which is heavily capital intensive. So what you are saying is right and that could happen.

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    Have you bought any telecom ancillary or 5G equipment stocks?
    No, not yet.



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
    The Economic Times

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