Reliance Communications rallies 12%, hits 52-week high on new roaming regulations

NEW DELHI: Reliance Communications Ltd rallied over 12 per cent in trade to hit its 52-week high of Rs 124.95 on Tuesday, but said there will be no free national roaming as of now, in a partial relief to operators.

Reliance Communication closed 11.14 per cent higher at Rs 123.70. It had hit a low of Rs 111.15 and a 52-week high of Rs 124.95 in trade today. The stock has been a market outperformer for the year 2013, up over 60 per cent.

Idea Cellular was trading 1.6 per cent higher at Rs 141.95, while Bharti Airtel reversed its morning gains and was trading 0.5 per cent lower at Rs 294.55.

The new ceiling is 25 per cent lower than current tariffs for incoming (75 paise vs current tariff of Re 1 per min) but in-line with current tariffs for local/STD outgoing (Rs 1/1.5 per min).

"In the context of prevalent concerns regarding 'free-roaming', we believe that TRAI order is positive for the industry and provides flexibility to subscribers as well as operators," Motilal Oswal said in a report.

"Complete abolition of roaming charges would have resulted in higher impact for operators and forced them to raise tariffs," added the report.

The brokerage firm maintains 'Buy' on Bharti Airtel and Idea Cellular which are trading at FY14 EV/EBITDA of 6.8/7.7x.