Company Name: AXIATA GROUP BERHAD
|Research House: OSK||Price Call: BUY||Target Price: 5.60|
KUALA LUMPUR: OSK Research Sdn Bhd today maintained its "buy" call on Axiata Group despite the revocation by India's Supreme Court of122 telecommunication licences held by eight operators, including Axiata's 19.7per cent-owned Idea Cellular and Spice Communication.
In a research note today, OSK said the fair value remained unchanged atRM5.60 per share but expected the news to contribute to further weakness in Axiata's share price.
As for Idea, the impact is expected to be minimal but the company is caught in a bind and is made to suffer due to the cancellation of licences despite being fully compliant at each stage of the licence allocation process.
Idea contributed less than 10 per cent of Axiata's net earnings.
"Excluding Idea's contribution, our sums-of-parts valuation on Axiata has dropped to RM5.30 (from RM5.60), which still represents a 12 per cent upside from current levels," added OSK Research. -- BERNAMA