How are experts seeing banking, telecom sectors?

Over the past few days some of the major banks and telecom have announced their results. Most of them have done reasonably well.

HDFC Bank has seen an asset growth of 55%. The bank would add around 150 branches by June 30, 2008. Central Bank's total business has grown by about 35.48%, at Rs 185,000 crore from Rs 136,000 crore last year.

Idea Cellular has reported 17.45% growth in its Q4 net profit of Rs 278 crore as against Rs 236.7 crore in previous quarter, a growth of 17.4%. Bharti Airtel has reported 7.58% growth in its Q4 net profit of Rs 1853 crore as against Rs 1,722.4 crore in previous quarter and 12.27% growth in its revenues of Rs 7,819 crore versus Rs 6,963.9 crore (QoQ).

Sudarshan Sukhani of Technical Trends said, ”We have seen a very sharp rally in telecom, thanks to results or whatever else. Now that’s also contributing to the Nifty’s rally. Telecom seems to be in a consolidation. We are now at the upper end of the consolidation - so telecom stocks are likely to stall and find resistance soon enough.” However, he feels that banking is a much better opportunity because it has been consolidating at the lowest levels. There is a lot of overhead room here, he thinks. Sukhani said, “The entire banking space is attractive. I have been recommending it and suggesting that banks are an investment opportunity, as well as wait for a breakout and then it’s a buying opportunity for traders - that breakout is slowly coming on and off in some banks or the other.”  

Ketan Karani, VP-Research, Kotak Securities said, “Banks, we believe that the worst is over. If the interest rates move also somewhat, it is already factored into the prices. But yes it would lead to slowdown in the economy. Inflation is a big concern globally - so it is not only going to impact India but it is going to impact the entire world over and with the way soft commodity, hard commodity prices are moving up and also the oil factor is impacting - we believe that the times are going to be really challenging and the real challenge over here is to maintain growth momentum in the economy and just not inflation control. These are two parameters, which have always had conflicting views. But always very clearly, when the entire world is facing an inflationary problem, we need to see that growth is maintained.”

E Mathew of Mathew Easow Fiscal Services is positive on Bharti Airtel. “It is very significant the way it has moved above Rs 895-900. The first target seems to be around Rs 945 but I wouldn’t be surprised. There is a section of the market which feels the results were great. I wouldn’t be surprised if Bharti goes up to Rs 945 and possibly even all the way up to Rs 970-975.”