Buy RComm on dips: Rajesh Jain, Market Strategist

Rajesh Jain, Market Strategist, in a chat with ET Now talks about RComm.

Big expectations from the Reliance AGM. We have got lot of fundraising activity that people have been watching out. With the kind of underperformance that RComm has had vis-à-vis the peers, what would you recommend?

RComm has to be one of the 3 stocks that you must have in your portfolio for the allocation that you have made to telecom because after Bharti and Idea, it is easily the best play and perhaps the most diversified play at that. Track record of the company is also tremendous. So you cannot wish it away just because there are some bad news and bad developments associated with this stock.

However, as an investor, I would watch the AGM and it may not give any answers on what the company is really going to be doing at the core level in terms of operations, in improving the efficiency of the operations and the marginal profitability of those operations. Of course all the news that we are constantly fed with and what gives a momentum ticker to the stock is the news on stake sales, on joint ventures, on balance sheet clean ups and all. Today, the incredibility is now associated with news flows or would probably rub itself off of whatever announcement come out of the AGM itself.

So again, it would be a temporary event which will swing this stock for a day or 2 but retail investors would do well to pick this stock up on dips because of the tremendous management background and the fact that it has got a very good footprint across the country and in whatever broadband services it offers, it is the market leader and going forward, has the best product.

Looking at the valuations, do you think it makes sense to buy it even at 170-165-160 odd levels from a long term perspective?

No, you should not commence buying Reliance Communications at this level, you have to wait for a dip and I would be a buyer at 10-15% dips which would easily happen come the quarterly numbers.