Not positive on telecom sector: Amit Goel

In a chat with ET Now, Amit Goel, Director, PACE Stock Broking Services, shares his views on the outlook of the telecom sector.

What would you do with the entire telecom basket right now - Bharti Airtel, Idea Cellular and RCom?

We continue to be a little circumspect on telecom. In fact, we are not very positive on telecom sector. The sector has probably seen its best days and while there has been a some sort of a revival in the market prices of these telecom stocks, in the last few months they hit a bottom, for example, Bharti hit a very major bottom at Rs 250-260 levels. But there was a relief rally, which is over now. If you look at the fundamentals, reality is a little grim there because the ARPUs are falling and subscriber additions do not seem to be picking up now. The pace for subscriber additions is probably slowing down a little. There is going to be lot of pressure on the profitability margins and plus, of course, their balance sheets are a little overstretched because of the 3G outflow. The next few quarters will be difficult for the telecom space and one is not really very positive on the broader telecom space.