KUALA LUMPUR: OSK Investment Research is maintaining its 'buy' call on Axiata at RM3.10 and it is expecting a robust set of results when the telco announces its 3Q results on Nov 30.

The research house is expecting the results to be underpinned by the sustained revenue momentum at Celcom, a better showing from subsidiaries  Excelcomindo (XL) in Indonesia,  Dialog Telecom in Sri Lanka, and a  larger contribution from its 14.99% stake in India's Idea Cellular.

"We maintain our forecast, sum-of-parts target of RM3.68 and 'buy' recommendation pending the release of its results," it said.

OSK Research said on Tuesday, Nov 17, that despite intense competition, Celcom continued to witness strong growth momentum in its mobile and wireless broadband segments in 3Q2009.

The research house says this should propel another quarter of sequential revenue growth (2Q: +5% q-o-q), supported by higher mobile spending during the recent Ramadhan period.

It expects contribution from mobile broadband to widen to 6% to 7% of revenue in 3Q from 5% in 2Q given the expectation of a robust q-o-q rise in subscribers. Celcom's showing comes when it  is facing aggressive competition from Packet One Networkds, which also benefited from higher defections from TM's Streamyx base in 3Q.

"We note upside to our forecast following the recently upgraded earnings for XL, and the strong showing at Celcom and Dialog. The three assets contribute to the bulk of Axiata's SOP at 88%.

"We like Axiata for its attractive blend of regional mobile assets. Its key share-price re-rating catalysts are better-than-expected results; and resurgant flow of foreign funds into the market on dissipating risk premiums. Axiata's foreign shareholding was at a record-low of 6.7% as at end-October 2009," the research house says.