Morgan Stanley has downgraded its view on India's telecom sector to "in-line" from "attractive", citing increased regulatory risks tied to the spectrum auction, and "relatively weaker" 3G outlook.
The brokerage has cut its rating on Reliance Communications to "underweight" from "equalweight", and slashed its target price to Rs 51 from Rs 109, citing a weaker balance sheet and saying the company faced the highest regulatory risk.
Morgan Stanley has also cut Idea Cellular to "equalweight" from "overweight", while reducing its target price to Rs 87 from Rs 134, citing its smaller balance sheet and a 32% outperformance in the last twelve months.
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