Telecom troubled with various issues: Shashank Khade

Shashank Khade, Executive Vice President-Portfolio Management Services, Kotak Securities, talks to ET Now on various stocks.

What do you make of what's happening to telecom per se? R Comm, if you track that one and if not R Comm, just broadly the telecom space with what’s happening to Bharti, Idea as well?

On the telecom space, there are various companies with various issues right now. The rupee depreciation has hurt Bharti substantially and hence you have really seen correction in the stock at the same time, so the foreign debt on these companies' book has really turned out to be a sour point for the company specifically for the quarter and clearly has led to increased cost of debt as perceived by investors.

On the other hand R Comm I guess, it is a question of deleveraging the balance sheet. I am not sure whether replacement of debt or replenishing of FCCBs by domestic debt would be cheered by the markets. The most important point here is can they really sell some assets to reduce debt? That could remain the single biggest positive factor if Reliance Communications can manage.

The tower business was being talked about for sometime. One needs to really see whether such type of transactions really happen, which can unlock a lot of value and which could really go down to repay debt, so that is quite interesting to look at.

Other than that, the telecom space prior to the last quarter was being utilised as a defensive sort of bet, especially when you had all sorts of problems around in terms of capex related companies. Telecom was one such safe haven till September, which investors have really looked forward to.