Buy Bharti and Reliance Communications on weakness:KIM ENG Securities

MUMBAI: KIM ENG Securities has recommended ���Buy��� on Bharti Airtel and Reliance Communications on declines. The brokerage plans to review its forecasts after the second quarter earnings.

���Telecom stocks declined after analysts downgraded stocks on concerns over sustainable ARPU. We maintain our ARPU forecast of a decline of 26% for FY10.

Assuming a 31% decline in ARPU this year, Bharti Airtel (BHARTI) earnings would fall less than those of Reliance Communications (RCOM) and Idea Cellular (IDEA).

We will review all our forecasts after Q2 earnings are released this month. With further declines, the stocks of Bharti on a PER of 9x FY11F and RCOM at 7x FY11F are very attractive. We recommend BUY on weakness for Bharti and RCOM,��� the brokerage said.