Merrill raises Bharti Airtel, Idea to 'buy'
Reuters Market Eye - Bank of America-Merrill Lynch upgraded Bharti Airtel (BRTI.NS) and Idea Cellular (IDEA.NS) to 'buy' from 'neutral' citing the positive outcome of the 2G auction this week.
BoA-Merrill said the "deep" under-performance in both stocks over the past 12 months, potential for more favourable policy decisions in areas such as spectrum pricing, and prospect of "strong" fiscal 2014-15 earnings growth would drive Bharti and Idea.
An auction of 2G airwaves attracted less demand than targeted by the government, leading to lower prices that are giving a respite to the debt-ridden industry.
Bharti gains 3.5 percent, heading towards its fourth day of gains. Idea is up 1.5 percent, gaining for a second day.
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The BSE Sensex and Nifty surged to record highs on Monday, tracking Asian peers which jumped on the prospect of further policy stimulus in China and Europe. Full Article