Karvy Stock Broking Limited has suggested investors to ‘sell’ Idea Cellular stock as there are full chances of a downward trend in this stock.

According to Karvy, investors can sell the stock around Rs 49.50 with a strict stop loss of Rs 52.50 to achieve an intraday target of Rs 45.

Karvy feels that Idea stock would remain under high pressure due to existing market condition.

Today (Feb 17), the stock opened weak at Rs 48.50, against its last closure at Rs 49 on the Bombay Stock Exchange (BSE) on Monday (Feb 16). Current EPS & P/E ratio stood at 3.17 and 14.97 respectively. The share price has seen a 52-week high of Rs 118 and a low of Rs 34.05 on BSE.

Karvy also suggested that if the stock fell below Rs 42, it may see more weakness. So the investors must sell Idea stock in today’s session. After selling the stock, the interested investors can purchase the stock again at a low price, for medium term prospective to make good profits.

The widely-popular Idea Cellular Company has roped in actress Shriya Saran girl as its new brand ambassador. Shriya replaces Abhishek Bachchan as brand ambassador after his agreement with the company ended recently.

Idea Cellular Ltd. (Idea) has ended the third quarter with a topline expansion of 13.1% q-o-q, backed by a healthy 13% share in the all-India net adds of 3.8 million and a 3.7% enhanced realization of 65 paise per minute.

The experts fell that the company’s market share (excluding Spice) to blow up beyond 11% by March 2010 from the current 9.9%.

Moreover, Idea’s brand, which has all-India recognition, renders it a cutthroat edge over the other participants in the new circles.

The operating margin will likely remain under pressure in FY10E–11E and is likely to drop to ~11% as Idea prefers for superior OPEX rather than CAPEX for network expansion.

Moreover, growing competition and diffusion in Class C circles calls for competitive pricing, which would further bring down ARPUs to around Rs250 and Rs210 for FY09E and FY10E, respectively.