Best stocks to buy in Indian telecom sector

Most of the brokerage houses have put Buy stock recommendations on Bharti Airtel, Idea Cellular and Reliance Communications stocks in Indian telecom sector. These big three could be considered as best investment options in sector.

MUMBAI: An impressive number of subscriber additions in November and expectations of further growth has made brokerages bullish on the Indian telecom sector.

Most brokerages have a buy rating on sector heavyweights like Bharti Airtel, Idea Cellular and Reliance Communication.

According to Bloomberg, 31 analysts have a buy rating on Bharti, compared to only one sell recommendation. Similarly, RCoM and Idea Cellular have 17 and 12 buy ratings respectively.

Prabhudas Lilladher, in a recent report, has said that "slowdown is yet to impact subscriber net additions". "Subscriber net additions continued on a strong note with 10 million subscribers being garnered by telcos for November 2008, a growth of 25% YoY," it says.

Greater geographic coverage by incumbents and attractive tariff plans has resulted in this growth, it further adds.

Similarly, Ambit Capital is of the view that in the nest four years, the subscriber base would be well over 600 million.

"We expect the growth in subscriber net additions to continue and expect the Indian mobile market to reach 605 million by FY12 thereby indicating a mobile teledensity of 51%," says Ambit.

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