Ignore telecom space, says Adrian Mowat, Chief Asian and Emerging Equity Strategist, JP Morgan.
Mowat told CNBC-TV18, "I wouldn't take a contrarian call on telecom space; we have seen in places like Korea that the telecom sector can underperform for many years. When you get highly competitive environment, when you get too many players in a space, it moves from being a high growth profitable sector to a sector that might have reasonable growth in subscribers but very little growth in profitability. And what happens is that it's a sector that is owned by growth investors who see growth disappearing and they sell out and the value investors need to see dividends before they get attracted and there is no evidence of attractive dividend yields yet emerging or capital management emerging as a theme within the Indian telecom space. So for now we are going to continue to ignore telcos."
