Neutral on telecom: Ramanathan K

Ramanathan K, CIO, ING Investment Management India, talks to ET Now on telecom stocks.

Do you think these problems are confined to Bharti alone of late by virtue of the foreign currency debt that they have or you are bearish on the telecom space in general as well?

I would not like to comment on a specific stock, I am not allowed to do it but on the sector, we are neutral. Yes, you have regulatory compulsions in terms of the fresh guidelines, which are yet to be formally announced while there have been some information, which has been published in the media.

Out of the two incremental information, which has come the 8% license fee I do not think so is a major issue but what is an issue is the charging for the extra spectrum, which could impact especially smaller telecom stocks not necessarily Bharti Airtel, so we would use this as an opportunity to increase or overweight the telecom sector rather than sell at current levels because we have seen such volatility during the 3G auction also.

There were a lot of comments on the auction bids being irrational and so on and so forth and the telecom sector got beaten down quite a lot after that but since then it has been one of the best performing sectors, so we believe that these are opportunities to overweight this sector from a portfolio perspective rather than selling at current levels or going underweight.