November 16, 2012 / 7:27 AM / 5 years ago

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.

An employee sits at a Bharti Airtel public phone booth installed at the airport in New Delhi October 23, 2012. REUTERS/Vivek Prakash/Files

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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