UBS, a foreign brokerage house has upgraded the Vodafone Idea ltd from ‘neutral’ to ‘buy’ and revised the target from Rs 13.10 to rs 18. UBS, which sees scope for a 70-80 per cent Vodafone Idea rally ahead, said a relief in the form of AGR reduction by the Supreme Court or equity conversion, moratoriums by the government is highly likely, especially given the government’s stated objective of ensuring three viable private telcos.
There are two main fundamental reasons behind UBS’s confidence:
- 50% probability of AGR dues waiver
- Mobile charges are set to be hiked by 25% post genral election (All three telecos may hike the data tariff by 25%)
Technical chart of Vodafone Idea
We can see a cup and handle pattern on monthly time frame indicating a strong bullish sentiment in the counter.
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