Idea Cellular may see 30-35% upside, says Roy

Idea Cellular may see 30-35% upside from current levels, says Gautam Sinha Roy, VP - Equity Strategy & Product, Motilal Oswal.
 
Roy told CNBC-TV18, “Telecom is one of our favorite sectors going into this year for both the reason that we expect voice tariffs to improve from the low levels that they had hit in the last half of CY12. So we expect some improvement in voice tariff. Also, data will become improvingly bottomed in terms of numbers for telecommunication companies.”
 
He further added, “Overall, from a yearly perspective, we continue to be positive. We have seen that inspite of the overall positivity; there has been volatility in these stocks, probably more due to the market being volatile. If we see some sort of positive news coming in, there is a good reaction to the stocks which is a good sign, which is again something that we have seen today. So, hopefully the fundamentals should play out there in terms of tariff increasing and consolidation has already happened or happening. So, if tariff increases follow as expect them to follow - that should be a long term positive for the sector.”
 
“We are positive both on Bharti Airtel and more on Idea because it is a pure play in the India story. So their valuation upsides exist to the tune of, for a target price, we have a 30-35 percent kind of upside from current levels, so definitely, positive on that sector.”