RBS downgrades telcos on regulatory risk, policy uncertainty

Royal Bank of Scotland has downgraded India's telecom sector to underweight from overweight citing greater regulatory risk, potential impact of policy uncertainty on growth, increased competition on Reliance Industries' entry and likely consensus downgrades.

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The bank has downgraded Bharti Airtel and Idea Cellular to hold from buy and Reliance Communications to sell from hold.

"We cut EBITDA estimates for our telcos by 1-12 percent for FY13 and 4-13 percent for FY14. Our EPS declines 3-30 percent in FY13 and 25-30 percent in FY14," the RBS note, issued on Friday said.

At 10 am, shares of Bharti Airtel were down 2.4 percent at Rs 322.95, Reliance Communications were down 2.44 percent at Rs 76.10 and Idea Cellular was up 0.06 percent at Rs 81.70.

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Reuters