Stay away from telecom stocks until November: Sanju Verma

Bharti Airtel, the country's largest telecom company, on Wednesday said its net profit fell 37% to Rs 762 crore during April-June as stiff competition, along with regulatory hurdles, higher capital expenditure and licence fee outgo, weighed heavily.

With results falling short of analyst expectations, Bharti was the worst-performer on the Bombay Stock Exchange, losing 6.6% to close at Rs 274 yesterday.

Verma says the stock correction is pricing in EPS downgrades. "We need to see progress on Bharti Infratel listing," she said on what could help the company ahead. 

Airtel has appointed a Committee of the Board of Directors to consider a public offer of its telecom tower unit Bharti Infratel Ltd (BIL) by selling up to 10% stake.

The 2G auction and spectrum bidding will be key trigger for telecom companies, Verma believes. However, she adds that it would be best to stay away from the sector till November of this year.

Shifting focus to the auto sector, Verma picks Mahindra and Mahindra as her top pick, followed by Maruti Suzuki .