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Mar 16, 2017 04:41 PM IST | Source: CNBC-TV18

Exit telecom space including Idea Cellular: Dipan Mehta

Dipan Mehta, Member at BSE & NSE recommends selling telecom stocks including Idea Cellular.

Dipan Mehta, Member at BSE & NSE told CNBC-TV18, "From a investment perspective, Idea Cellular is a sell and so are the other telecom stocks. I think there is disruption taking place in the telecom industry and one doesn’t really know what the exact outcome will be couple of years from now. At the same time balance sheets are stretched, expenses are going up for these companies and yields are going to come off."

"Even if there are three major players there will be intense competition and fight between them because end of the day the only way to attract the customer is by lowering the plan or the rate at which they are offering data or voice. When you have a situation like this it is going to be quite disruptive," he added.

"So, I would say that Idea at its present level is a great sell. Only caveat here is that in case the valuation at the time of the merger of Vodafone is higher than these levels then to that extent I think investors who sell at this price point would have to forgo of those gains. However, my sense is that these are fair values for Idea and it is a great level to exit out of Idea as well as other telecom stocks."

"I think there is decent growth elsewhere, in some of the other consumer oriented businesses where one could focus on. So, telecom for us is a complete sell at this point of time."
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