Accumulate Reliance Communications on dip: Angel Broking

Mayuresh Joshi, VP Institution at Angel Broking told CNBC-TV18, “If you would have seen most of the positive rub-off effects of Reliance whether it be the intercity fibre transfer, the Reliance Globalcom that is the undersea cable business of Reliance Communications; all these structured deals were more or less just stated into the stock price and into the pipeline as well. The only missing jigsaw was the Reliance Infratel and that too has happened today.”

He further added, “Fundamentally it all depends again over the next three to four quarters or how the monetisation process actually happens in a way that the entire debt of Reliance Communication can be reduced substantially and the interest outgo of almost Rs 2800 crore can come down on a substantial effect as well. So, they are playing the right strategies in reducing debt as well as converting these subscribers from CDMA to GSM because that is where the data usage in terms of spectrum comes into use and average revenue per user (ARPUs) increases.” “So, more or less most of the positives are priced in into the stock in the near to medium-term. However, if the investor has a longish view and if the monetisation happens, on declines the stock can be accumulated for good gains going forward,” Joshi said.