Goldman Sachs reiterates buy rating on Reliance Communications

RCom cmp: Rs 468.15 target price: 678 Goldman Sachs has reiterated its buy rating on Reliance Communications with a 12-month price target of Rs 678, after talks with a merger with MTN failed. “We have maintained that any outcome of Reliance Communications’ dialogue with MTN for a potential combination of their business would be neutral-to-positive for Reliance Communications, unless Reliance Communications overstretches its balance sheet in the process. Accordingly, a ‘no-deal’ with MTN removes a near term overhang on the stock,” the investment bank said in a client note. “Stock catalysts playing out over the next 6-9 months — launch of pan-India GSM services and Reliance Communications securing external tenancy on its tower network – crystallise value of RCOM’s core business and its tower subsidiary,” Goldman added.