DSP Merrill Lynch is bullish on Reliance Communication

DSP Merrill Lynch is bullish on Reliance Communication and has recommended buy rating on the stock with a target of Rs 950, "We have raised our PO for RCom to Rs 950 per share (vs Rs 690 earlier), placing it at the upper end of Bharti’s 1-yr fwd trading band of 13-15x EV/EBITDA. RCom’s current valuations appear to be at 25-30% premium vs Bharti. We believe this mostly reflects recent policy catalysts for RCom’s nation-wide GSM plans. Short-term, RCom’s premium will likely sustain owing to expected further unfolding of relatively helpful policy measures like mobile number portability. Once policy jitters subside, the valuation gap may narrow led by renewed focus on operations." says DSP Merrill Lynch research report.