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Idea Cellular, Bharti Airtel extend fall on brokerage downgrade

Idea Cellular has tanked nearly 12%, while Bharti Airtel down 7% in past two trading sessions on the BSE.

SI Reporter Mumbai
Shares telecom companies, mainly Idea Cellular and Bharti Airtel, are trading lower by up to 5%, extending their previous day’s fall, on reports that Reliance Jio Infocomm's participation in the upcoming spectrum auction will hurt profitability of telecom companies.

Also Read: Bearish bets weigh on telecom shares

Idea Cellular has tanked 5% to 148, after falling over 6% on Thursday. The stock of the country’s third-largest telecom operator has plunged 12% so far in past two trading sessions. Bharti Airtel too, down 2% at Rs 310, has extended its previous day’s fall of nearly 5% on the BSE.

Analysts at Credit Suisse downgraded its rating on the telecom sector to ‘underweight’, while cutting its 2014-15 earnings estimates for Bharti Airtel by 22% and for Idea Cellular by 27%, the Business Standard report suggests.

Analysts said Reliance Jio’s surprise entry has raised worries about the possibility of higher bidding prices at the auction. Reliance Jio, a unit of Reliance Industries (RIL) and seven other companies will bid for 2G spectrum starting February 3. 
 
 

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First Published: Jan 17 2014 | 1:31 PM IST

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