Bharti Airtel: Trading Buy Target: 374
Ø Owing to regulatory uncertainties the stock price of Bharti Airtel has witnessed sharp decline over the last one month. We feel that the major concerns are overdone as of now.
Ø Market has failed to take cognizance of positives such as tariff hike and its impact on revenue growth, potential benefits from the policy decisions such as relaxation in M&A norms, sharing of spectrum etc.
Ø On the Flip side the recent depreciation in INR to result in higher revenue recognition from Africa operations. Accordingly, expect improvement in profitability. Bharti result will be out on 8th Feb 2012.
Ø From derivatives perspective & technical analysis the stock has made a short term double bottom at Rs 320 levels. .(see the chart attached).The stock has moved up by 7% from last week’s bottom while open interest is has come down by 10%.
Ø On daily chart RSI oscillator is also on rising mode that makes upside momentum reliable.
Ø We suggest going LONG on Bharti With SL:320 with target of 374
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