Shares of Reliance Communications have gained 8 per cent on value buying as the stock had corrected steely post dismal performance in March 2016 quarter, negative call by brokerages and shift to a smaller index by MSCI.
Foriegn brokerage firm CLSA has downgraded its rating on the stock to "sell" and has almost halved its target price to Rs 43 from Rs 79 earlier.
Bank of America Merrill Lynch has also retained its "underperform" rating on the stock while slightly trimming the price target to Rs 43 from Rs 47 earlier. Motilal Oswal's target price of Rs 40 remains unchanged on the stock but it maintains its sell rating.
Net profit, sales
Huge debt and weak show on operational performance are seen as concerns on the company. In March 2016 quarter, the company's consolidated net profit fell 22.36 per cent year-on-year to Rs. 177 crore, while sales dipped 1.8 per cent to Rs. 5,579 crore.
Reliance Communications have been shifted from MSCI Global Standard Indexes to MSCI Global Small Cap Indexes effective June 1. The company's shares are down 7 per cent since the announcement made by MSCI on May 12 after correcting sharply in between.
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