Idea, Bharti Airtel likely to do well: Suresh Mahadevan

Suresh Mahadevan, Head-Asia Telecom at UBS AG told CNBC-TV18, "For Bharti Airtel we are roughly deducting Rs 70 per share and for Idea Cellular we are deducting around Rs 50 per share. The bigger story in Indian telecom is not this. I think it is about two things, one it is about pricing power. The last two quarterly numbers for Bharti and Idea; I think Idea revenue per realisation on voice has gone up by 7 percent in the last two quarters and Bharti's has gone up by 5 percent."

He further added, "In terms of operating leverage for Idea, I think revenues were up 18 percent year-on-year for the second quarter, EBITDA was up like 35 percent and net profit was up like 85 percent. The last five years has seen a hyper competition in the sector, so the operators have resorted to having a very tight cost structure. Now if they are going to get some pricing power with minutes growth, this is a bonanza for these companies and both these stocks should do really well over the next two-three years."