Telecom
Stocks Outlook for the week (09 - 13.07.2012)
Telecom stocks are seen trading
higher next week on the back of the split judgement given by the Telecom Disputes
Settlement and Appellate Tribunal Tuesday on the legality of intra-circle
roaming pacts between operators for 3G services. The verdict means there
is a status-quo as of now, whereby service providers like Bharti Airtel,
Vodafone India and Idea Cellular, which do not have 3G spectrum in some
circles, can continue providing 3G services in circles where they do not have
licence, according to legal counsel representing the companies. Stocks
will also takes cues from the meeting of the Empowered Group of Ministers
likely to be held on Monday. The panel will be now headed by Home Minister P.
Chidambaram. According to reports, the panel will now only decide the
modalities of the 2G spectrum auction process, whereas the contentious issue of
spectrum reserve price will be decided by the Union Cabinet. Stocks of Bharti
Airtel are seen trading positively, as investors havetaken long positions and
as the stock has been able to close above its crucial resistance level of 320
rupees.
mab �
y e � @ ign:justify'>Markets, especially Bank Nifty
still has some short positions standing in it and these shorts would lend
support in every dip. As downside looks limited in large caps and positive bias
and consolidation are two likely probabilities, midcap may catch up with large
caps and outperform in near term. Early trends in Apr-Jun earnings will also emerge
next week, with IndusInd Bank and HDFC Bank slated to declare their results on
Tuesday and Friday, respectively. Apr-Jun is generally a subdued period
for bank profits, especially on-quarter, as it coincides with slack loan demand
season for the industry. Overall, we do not expect any major surprises in
Q1FY13 (lacklustre due to seasonality). While our top large-cap picks are SBI
and Axis Bank, we prefer YES Bank among mid-caps from a long-term
perspective. Punjab National Bank and Oriental Bank of Commerce on strong
asset quality while it sees Union Bank of ann� 5 e � @ two weeks. The company has been aggressively buying its stock at levels around 700 under the ongoing buyback at up to 870 rupees per share and that has supported the counter. However, little upside from current levels in the near term. We believe RIL's core business will show earnings growth starting in 3Q FY13 (Oct-Dec), after three quarters of poor to flat results, but any turnaround will likely be modest, predicated on our projection of only moderate improvement in RIL's refining margin and a bottoming out of petrochemical margins.
er} � e � @ headroom for upside potential following the recent rally in the stock.
