Ideal Cellular: Good investment in Large Cap stock for long term
A sharp reversal in its stock price from Rs 161 to Rs 91 makes Idea Cellular a good investment for those looking to add a large-cap stock to their portfolio. Investments with a 18-24 months’ horizon can be considered in the stock. At Rs 91, the stock trades at 24 times its current earnings and 19 times its estimated FY-09 earnings.
With earnings and subscriber growth rates comparable to its top-tier listed peers, the stock may deliver reasonable capital appreciation. These are few of the reasons why Idea has strong position in the telecom services landscape.
- Robust subscriber additions and improving performance in its three new circles,
- Benefits accruing from the Indus Towers stake
- The recent allocation of spectrum, which will enable an entry into the high ARPU (average revenue per user) Mumbai circle
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