Retail investors go for telecom stocks only when there is momentum: Deven Choksey

In a chat with ET Now, Deven Choksey, MD, K R Choksey Securities, shares his views on why retail investors may give telecom stocks a miss.



ET Now: In general, are retail investors — a target audience — better off giving telecom stocks a skip? Telecom stocks are great stocks if you are an institutional investor. But given the business regime or the regulator environment, are retail investors perhaps better off giving them a skip?

Deven Choksey: Retail investors walk into this particular space when the momentum gets built in. In case of Bharti we have seen in recent past some amount of momentum getting built in at the same time many of the telecom stocks like RComm, Idea, etc. Both have attracted some amount of momentum in the recent past and that is where they come in. They typically do not look at the business for a very long period of time and that is the fact. Here, in case of most of the telecom companies, including Bharti, the ROE part or the ROC part remains on a significantly lower side. That is where one could possibly shift into the different other portfolio where you may probably find the underlying values far more attractive and that is where some of the retail investors start building their long portfolio vis-à-vis the telecom stock.

So I would say that yes till the time the momentum continues they would be part of it. Otherwise, from a long term investment perspective, the opportunity would be elsewhere, wherever the valuations are more attractive.