Worst is over for telcos, says Maybank Kim Eng

MUMBAI: Brokerage firm Maybank Kim Eng Securities has upgraded India’s telecom sector to ‘neutral’ from ‘negative’, saying that the worst was over for the industry.

Average revenue per user (ARPU) will increase and free cash flows improve in the sector, with lower capital expenditure lifting severe pressure on market values, it said.

The brokerage firm upgraded Bharti Airtel to ‘buy’ from ‘hold’ with a target stock price of ₹400, citing improving financials and attractive valuations. It raised Vodafone Idea to ‘hold’ from ‘sell’, with a target price of ₹5.80, saying the stock was fairly valued after a sharp fall in the past three months.