Bharti Airtel Ltd. (ISE: 55QN) missed analyst expectations for the second quarter. The largest mobile phone operator in India gained clients in the country's smaller towns and villages, resulting in lower than expected revenues. The company pulled in INR99.4 billion ($2.05 billion) for the second quarter -- compared to analyst expectations of INR101.7 billion. Nonetheless, revenue was up from INR84.8 billion for the second quarter of 2008. Net income grew 24% to INR25.2 billion. Net of a tax gain, however, the company missed analyst forecasts of INR23.6 billion.
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Continue reading Bharti misses the mark on earnings and revenue
Wal-Mart, Bharti to open 15 wholesale locations within three years
Wal-Mart Stores, Inc. (NYSE: WMT), which recently had to delay its first India store opening due to local violence, has announced it will be opening 15 wholesale locations in India with partner Bharti within the next three years. Along with each location will come a $7 million investment from the world's largest retailer.Continue reading Wal-Mart, Bharti to open 15 wholesale locations within three years
Wal-Mart, Bharti delay first India store opening
When Wal-Mart Stores, Inc. (NYSE: WMT) joined up with India's Bharti a few years back to bring the world's largest retailer to India, it probably thought things through very well. Of course, entering huge markets like India and China was a no-brainer for Wal-Mart, after failing in markets like South Korea and Germany. Little did Wal-Mart know that violence would someday delay its grand opening in India.Continue reading Wal-Mart, Bharti delay first India store opening
Bharti and MTN: Ready for a $23 billion deal?
As global markets improve, we are now seeing renewed interested in M&A. Interestingly enough, it looks like a $23 billion deal is brewing between cell phone operators Bharti Airtel Ltd. -- the largest in India -- and South Africa-based MTN Group Ltd., according to a report in the Wall Street Journal.Actually, Bharti-MTN already tried to put a deal together -- about a year ago. But things fell apart based on factors like valuation and control.
Continue reading Bharti and MTN: Ready for a $23 billion deal?
The Wal-Mart Weekly: 2008 shaping up to be a winning year
Welcome to the 68th installment of The Wal-Mart Weekly, a column dedicated to bringing you insight, wit, facts, results, opinions, and just a bit of everything else when it comes to a very hot topic these days: Wal-Mart.
This week, I'll be taking a look at the most recent financial results from Wal-Mart Stores Inc. (NYSE: WMT). The retailer continues to state the the federal tax economic stimulus checks being used by customers in its stores have buoyed it results.
Overall, this is good news. When the tax stimulus checks run out, though, will Wal-Mart continue to post such great sales figures like it did in June 2008? Remember June 2007?
Last summer, Wal-Mart also easily defeated analyst calls and toasted the expected same-store sales growth. Is seasonality more a part of the picture than tax checks? How about gas pricing stamping out multiple shopping trips by many families? All of this contributes, I would posit.
Continue reading The Wal-Mart Weekly: 2008 shaping up to be a winning year
Wal-Mart solidifies India plans with Bharti for 2008
Although Wal-Mart Stores, Inc. (NYSE: WMT) and Indian retail powerhouse Bharti hooked up in a 2007 partnership t being Wal-Mart's presence into India, concrete plans were not set in stone. That is, until now. The world's largest retailer has taken a measured approach into entering the Indian market without upsetting the traditional "mom-n-pop" retailers that form the retail backbone of Indian consumer spending.But, Wal-Mart has now laid out plans to open 10 to 15 large retail stores [subscription required]within the next seven years in a disciplined and orderly way. These locations will employ an estimated 5,000 Indian citizens and will be 50,000 to 100,000 square feet in size. The first is expected to open and be ready for the public by the end of this year.
With an Indian retail market valued at $300 billion -- but being fed by small, family-run operations -- Wal-Mart of course wants its share of that pie. In addition to going after Indian's huge retail marker with global retail competitors, Wal-Mart also wants to modernize India's retail industry and supply chains at the same time. That would give it a large competitive advantage over the established retail industry, even though nobody is talking about that. It's modus operandi for Wal-Mart, though. Over time, it beats the competition down -- and it's why it has become the world's largest retailer in the first place.
Wal-Mart and Bharti partnership seen as profitless for up to five years
Wal-Mart Stores (NYSE: WMT) announced this year that it would be partnering with Indian retail company Bharti to establish itself in that booming market in the wake of international failures in both South Korea and Germany in 2006. India and China are two markets where the world's largest retailer needs an instant presence apparently, and instead of going it alone this time, the retail giant is partnering with established, in-country players to ensure its success.
But if it's instant success the retailer wants, it won't come in the way of profits. Bharti's chairman this week noted that high rental costs in India will likely force the Wal-Mart partnership to post losses for the first four to five years in that country -- probably not something Wal-Mart needed to hear. It's hard to imagine commercial rental prices being high enough to damp profits on a burgeoning venture like a Wal-Mart partnership, but according to Bharti that is precisely what will happen, as the rental situation is being described as a "dilemma."
However, it's not that Wal-Mart is opening stores on every corner in India or anything -- the retailer plans to open 15 facilities over the next seven years in the 50:50 retail joint venture, with sizes ranging in the 4,500 square meters to 9,000 square meter space. That's tiny compared to existing U.S. Supercenters, so Wal-Mart's strategy here is apparently to start small and grow like the dickens at the most appropriate time. If Wal-Mart hoped to make up for slowing sales in the U.S. with sales from its Indian venture, that probably won't cut it. My perception is that China is the larger short-term opportunity here.
Newspaper wrap-up 6-28-07: Ford launching incentive program
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MAJOR PAPERS:- Carl Icahn has predicted that the private equity market has peaked at the Wall Street Journal's Deal and Deal Makers Conference, reported the Wall Street Journal.
- Imperial Tobacco Group plc (NYSE: ITY) and CVC Capital Partners, a private equity firm, are both looking at Altadis, the leading maker of cigarettes in Spain and France, with a final price of over $17B expected, reported the Wall Street Journal.
- Ford Motor Company (NYSE: F) is set to launch a new national incentive program today featuring no-interest financing for 36 months on all 2007 Ford, Lincoln and Mercury vehicles, signalling pressure for the company to sell vehicles, reported the Detroit Free Press.
- Bear Stearns Companies Inc (NYSE: BSC) has appointed Tom Marano, a leading executive and highly regarded mortgage-bond trader, to oversee the bailout of its hedge fund collapse, reported the New York Post.
- Bharti and Wal-Mart Stores Inc (NYSE: WMT) appear to be close to finally sealing a partnership, reported the Economic Times.
Bharti Wal-Mart locations expected in India by early 2008
Wal-Mart's (NYSE: WMT) focus on China and India as leading international prosperity markets is pretty well-known by now. While Wal-Mart's growth is stagnating here in the U.S., the world's largest retailer is looking to immediate gratification in international markets as it tries to grow that enormous $344 billion full-year revenue stream even higher.
Wal-Mart's partnership with India's Bharti is going to take some time since there are brand management and legal issues to get past, but Wal-Mart expects to begin opening the first of six stores in less than a year. While that may sound small, Bharti Enterprises group chairman and CEO Sunil Mittal indicated that these initial openings will just be the start, as Wal-Mart/Bharti may "put up several hundred stores over four to five years".
Unlike Wal-Mart's purchased interest in China's Trust-Mart retailer (which gave the company instant access to the Chinese market), India is a little different. Wal-Mart and Bharti are operating as a joint venture, which provides a few details that must be shored up before complete retail operations can commence. Wal-Mart's interest in India, though, goes beyond a possible revenue stream. The world's largest retailer has stated that it intends to source more products from within India as well as develop a supply chain in that country.
So, as same-store sales slow in the U.S. (unlike some of the competition), Wal-Mart's progressive international strategy is starting to take some serious roots here.
Wal-Mart's partnership with India's Bharti is going to take some time since there are brand management and legal issues to get past, but Wal-Mart expects to begin opening the first of six stores in less than a year. While that may sound small, Bharti Enterprises group chairman and CEO Sunil Mittal indicated that these initial openings will just be the start, as Wal-Mart/Bharti may "put up several hundred stores over four to five years".
Unlike Wal-Mart's purchased interest in China's Trust-Mart retailer (which gave the company instant access to the Chinese market), India is a little different. Wal-Mart and Bharti are operating as a joint venture, which provides a few details that must be shored up before complete retail operations can commence. Wal-Mart's interest in India, though, goes beyond a possible revenue stream. The world's largest retailer has stated that it intends to source more products from within India as well as develop a supply chain in that country.
So, as same-store sales slow in the U.S. (unlike some of the competition), Wal-Mart's progressive international strategy is starting to take some serious roots here.
Wal-Mart eyes purchase of Indian logistics company
Wal-Mart Stores, Inc. (NYSE: WMT) continues to get slammed from the media and retail critics as not changing and reacting fast enough to stay ahead of the retail discount crowd these days. Sure, the company is making record amounts of revenues (profit margin is another matter), but the company's monthly same-store sales stats and quarterly results aren't comparing to established expectations, nor are they outshining results from competitor Target Corp. (NYSE: TGT).
It's hard to measure Wal-Mart against any other retailer just based on its sheer size, merchandising prowess, and customer availability (supercenters seem to be everywhere these days), but the company has clearly made some strategic errors of late that have impacted results. While I'm not sure which traffic drivers Wal-Mart plans on to get feet in the door (then selling as much as possible to that captive audience), its recent admission of apparel planning mistakes seems to underscore the challenges the world's largest retailer has in trying to get its shine back.
While sales in the U.S. continue to get a collective "yawn" from market pundits and journalists, the company's about-face move in international retail seems to be moving rather fast as the company wants to reap more sales and margin from those markets than from the U.S. market (which takes time investors are not willing to give, it seems). Wal-Mart's recent partnerships with China's Trust-Mart and India's Bharti state to the world that Wal-Mart is serious about its international plans, even in the face of market withdrawals in Germany and South Korea in 2006. The rumor that Wal-Mart may be looking to acquire or take a stake in Indian logistics and retail distribution company Radhakrishna Foodland says that Wal-Mart is placing a pretty good deal of importance into rapidly-expanding markets (India is at the top of that list with China).
Wal-Mart's entry into India not easy
Is Wal-Mart Stores, Inc.'s (NYSE:WMT) entry into a new international market -- India -- going to be an easy ride at all? Well, the world's biggest retailer's plans to enter India in partnership with India's Bharti that was announced last November in an attempt to have a memorandum of understanding to explore business opportunities in retail within that rather populous country.Wal-Mart's partnership with Bharti would give the global retailer a direct entry into India's huge base of retail dollar spending -- in the area of $300 billion U.S. dollars.
But is Wal-Mart's possibly foray into India coming under political attack? Why wouldn't it? It's quite a move for the world's biggest retailer to join with an established Indian presence to "explore business opportunities". But, Bharti is clearing the air -- somewhat -- by saying "Bharti will manage the front-end 100%, while Wal-Mart will provide support at the back-end, logistics and supply chain."
Wal-Mart gets $7 billion investment
Wal-Mart Sores Inc.'s (NYSE:WMT) entry into the Indian market will receive a pretty huge lift with the announcement of a $7 billion investment by Bharti. The Indian company has agreed to partner with the world's largest retailer to open locations in India where Wal-Mart currently has no retail presence.Bharti said that it will invest $7 billion by 2010 to ensure that the retail joint venture is setup and started with the resources it needs to be successful right from the start. The two companies will be setting up 200 large supermarket-type stores and hundreds of smaller large-format stores.
The prize? Wal-Mart's appetite to cater to an estimated 300 million Indian citizens -- a population that has become increasingly affluent and a market that global retailers are eying with jaws wide open. This piece of pie is up for grabs -- like China -- and when growth slows in the U.S., to other global markets go the retailers.
Wal-Mart wins India Deal -- great for Wal-Mart, and for you?
Wal-Mart Stores, Inc. (NYSE:WMT) beat Britain's Tesco PLC to a deal with India's Bharti and will be operating stores as part of a joint venture with Bharti in India. Right now India's retail industry is estimated to total about $300 billion, but is expect to grow to $427 billion by 2010 and $637 billion by 2015. "This joint venture is a winning combination. Wal-Mart's logistics skill and Bharti's execution capability will create a potent force in the Indian market," Gajendra Nagpal, director at Unicorn Investments, told Reuters.
The two companies will start opening stores in India in 2007. Bharti's Chairman, Sunil Mittal, says he expects to have several hundred stores across India in four to five years. Well, we know how quickly Wal-Mart stores go up here, so there's no reason to doubt that estimate.
Bharti did not disclose the financial terms of the deal, but industry sources estimate the initial investment to be around $100 million with an increase up to $1.46 billion as the joint venture grows. No doubt the best chance for growth at Wal-Mart is overseas. India and China are the two hottest growth markets. This deal will lock Wal-Mart into a great spot to take advantage of India's booming economy. Wonder if it will mean any new jobs for U.S. citizens?
India's Bharti close to choosing a retail partner -- perhaps Wal-Mart
Wal-Mart Stores, Inc. (NYSE:WMT) is now recognized as a company that enters foreign markets that show great future potential -- like China and India -- to counter losses as in South Korea and Germany. Bharti, one of India's largest conglomerates, has reportedly been talking to some of the world's largest retailers in its effort to try and hash out a retail partner for a joint retail venture in India's rapidly growing marketplace. Both Wal-Mart and Tesco PLC (LON:TSCO) have been in talks with Bharti.With India's retail sector set to continue exploding, everyone from France's Carrefour to Germany's Metro AG to Britain's Tesco is trying to get a foothold into the country. Wal-Mart is not standing still either, having wanted to crack into the Indian market just as bad as any of the competition.
This is no small potato. India's retail industry is estimated to be right around the $300 billion mark presently and is forecast to grow to $427 billion by 2010 -- and even further to $637 billion by 2015. Anyone who's anyone in the retail industry surely wants a piece of that pie. Although companies like Wal-Mart and Tesco can sell wholesale in India, they -- and others -- have so far been banned at the retail level.
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