Reliance Comm
CITIGROUP has downgraded Reliance Communications’ rating to ‘hold’ from buy while lowering its price target to Rs 530 from Rs 760, post-first quarter results.
CMP: Rs 436.80
Target Price: Rs 530
CITIGROUP has downgraded Reliance Communications��� rating to ���hold��� from buy while lowering its price target to Rs 530 from Rs 760, post-first quarter results. ���Though RCOM has been benefiting from the continued wireless growth in India, it has been constrained by the CDMA network in terms of market share and elasticity. The change in consumer mix and market share gains depends on the proposed GSM foray ��� beginning end-2009,��� the investment bank said in a client note.
���Competitive pressures, though intense, should continue to be rational. Yet, there are inherent risks in the execution of the dual-network strategy (i.e. cost duplication, low market share gains) that cannot be wished away,��� Citi said. ���The hive-off of towers in a separate company (RTIL) has business potential with increasing number of operators, and could unlock value in the medium term,��� it added.
Disclaimer: The above stocks are picked up at random from research reports of brokerage houses. Investors are advised to use their own judgement before acting on these recommendations. ET does not associate itself with the choices.
Target Price: Rs 530
CITIGROUP has downgraded Reliance Communications��� rating to ���hold��� from buy while lowering its price target to Rs 530 from Rs 760, post-first quarter results. ���Though RCOM has been benefiting from the continued wireless growth in India, it has been constrained by the CDMA network in terms of market share and elasticity. The change in consumer mix and market share gains depends on the proposed GSM foray ��� beginning end-2009,��� the investment bank said in a client note.
���Competitive pressures, though intense, should continue to be rational. Yet, there are inherent risks in the execution of the dual-network strategy (i.e. cost duplication, low market share gains) that cannot be wished away,��� Citi said. ���The hive-off of towers in a separate company (RTIL) has business potential with increasing number of operators, and could unlock value in the medium term,��� it added.
Disclaimer: The above stocks are picked up at random from research reports of brokerage houses. Investors are advised to use their own judgement before acting on these recommendations. ET does not associate itself with the choices.
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