Telecom Stocks Outlook
May stay in range; Vodafone Idea results eyed
This story was originally published at 21:41 IST on 9 August 2024
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MUMBAI - Shares of telecommunication companies are expected to move in range in the upcoming session, analysts said. The June quarter earnings of telecom major Vodafone Idea, scheduled for release Monday, will also lend cues to the investors, they said. Telecom stocks, barring Vodafone Idea and Tata Communications, have fallen for two straight weeks.
Investors will watch out for progress on Vodafone Idea's adjusted gross revenue dues case in the Supreme Court as any developments on that front will drive the stock, a research analyst at a domestic brokerage firm said. Shares of Vodafone Idea closed 1.5% higher at 16.10 rupees on the National Stock Exchange.
For the long-term, another tariff hike, which is a major trigger for telecom stocks, of around 20% can be expected in 6–8 months, the analyst said. "Price hikes in the upcoming 2–3 years will contribute to 10-12% of telecom companies' bottomline," the analyst said. The analyst, who is bullish on Vodafone India and Bharti Airtel, said the consolidation in telecom companies is now behind.
The cash-strapped Vodafone Idea is expected to remain loss-making during the June quarter, for the 24th quarter in a row. The telecom services provider is likely to report a consolidated net loss of 80.47 bln rupees for the quarter, according to the average of estimates by four brokerages. The company reported a net loss of 76.75 bln rupees for Jan-Mar and 78.4 bln rupees for the June quarter a year ago. The estimates for the bottom line were in the range of 74.9 bln rupees and 86 bln rupees.
The company's consolidated revenue may remain unchanged from a quarter ago at 105.87 bln rupees during Apr-Jun, the estimates showed. When compared year-on-year, the topline is seen 0.6% lower. The highest projection for revenue was 106.18 bln rupees while the lowest was 105.29 bln rupees.
TOP HEADLINES
* PRESS: Govt sounds out sovereign funds for Vodafone Idea stake sale
* Bharti Airtel expands Wi-Fi svc to 2 mln more homes in West Bengal
* 3M India Apr-Jun PAT up nearly 26% YoY to 1.46 bln rupees
* Earnings Review: Bharti Airtel consol PAT doubles on qtr, beats view
* Earnings Outlook: Vodafone Idea's net loss to deepen in Apr-Jun
Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:
| Company | Price | Week-on-week change in % | Resistance | Support |
| Bharti Airtel | 1,464.10 | (-)2.00 | 1492.50 | 1443.10 |
| Mahanagar Telephone Nigam | 63.23 | (-)15.80 | 68.20 | 60.70 |
| Reliance Industries | 2948.60 | (-)1.70 | 2978.90 | 2896.90 |
| Tata Communications | 1887.50 | (-)3.30 | 1928.40 | 1842.60 |
| Tata Teleservices Maharashtra | 92.92 | (-)5.20 | 97.90 | 90.10 |
| Vodafone Idea | 16.10 | (-)0.10 | 16.50 | 15.80 |
| Nifty 50 | 24367.50 | (-)1.40 | 24474.70 | 24257.60 |
| S&P BSE Sensex | 79705.91 | (-)1.60 | 80181.60 | 79311.30 |
End
Reported by Anjali Singh
Edited by Akul Nishant Akhoury
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