Telecom sector to get re-rated in coming months: Saurabh Mukherjea

In a chat with ET Now, Saurabh Mukherjea, CEO-Institutional Equities, Ambit Capital shares his views on the telecom sector. Excerpts:

ET Now: What is the view on telecom because most tend to believe that telecom is now finally coming out from the cloud of regulatory hurdles and a whole lot of brokerages are now turning positive on the prospects of Bharti as well as Idea?

Saurabh Mukherjea: Four months ago we have been a long-standing buyer of Bharti and we turned a buyer on Idea as well for the reasons you are mentioning. Our take once Rahul Khullar took charge at Trai was that he will inject sanity into the telecom regulatory debate, which he has and the insane levels of competition that we saw say couple of years ago would abate. We are seeing regulatory sanity come back to the sector. We are seeing sensible spectrum auctions or sensible rules for spectrum auctions, we are seeing the ARPMs rise and in the domestic context, telecom in India should get re-rated over the next couple of months.

In Bharti’s case its African problems are a different issue altogether but in Idea’s case the domestic recovery should help Idea quite nicely and telecom as a sector should get re-rated over the next couple of years.