Telecom companies are likely to underperform over the next two-three months due to the uncertainty over how the firms plan to make payments under the government's definition of adjusted gross revenue (AGR), which was upheld by the Supreme Court last week, said market expert Dipan Mehta.

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The court has held that all revenues, except for termination fee and roaming charges, will be a part of the AGR. Telcos had argued that non-telecom, non-core revenues should not be a part of the AGR. With the judgement, the SC has exposed the incumbent telcos to potential demands by DOT of up to Rs 1.33 lakh crore.

"I think it is a fresh uncertainty as far as telecom stocks, the listed ones standalone, are concerned. Investors will try and discount and factor in this uncertainty so you could expect underperformance over the next 2-3 months till this particular issue doesn’t get resolved and it is not just the liability, I think more importantly it is the companies' response as to how they are going to deal with this particular payment and where they are going to raise the resources from for such a large payoff they have to make," said Mehta in an interview with CNBC-TV18.

Talking about Bharti Airtel, Mehta said, “Bharti Airtel is trying to crystallise the exact liability out of this particular judgement and it is certainly going to have a negative effect. It is not that Bharti’s balance sheet is pristinely clean and they can take on such kind of liabilities and move on ahead. It is going to affect its debt rating, it is going to affect its leverage, it is going to affect its operating profit margin and as well as interest cost going forward

Sharing his views on Tata Motors, he said, “It is a company which has got a very high degree of volatility in earnings and it is not for the long-term investor. Traders will take this opportunity and could see maybe another 10-15 percent upswing in the stock price. But as a long-term investor if you are stuck in Tata Motors for some reason, then you should look at exit opportunities over here. This is not a really secular growth story.”