Telecom Stocks Outlook
Stock-specific action likely next week
This story was originally published at 22:06 IST on 23 August 2024
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MUMBAI - Stock-specific action is expected in the telecommunications sector next week, analysts said. While Bharti Airtel and Reliance Industries look like attractive bets for investors, market participants remain cautious about Vodafone Idea owing to the adjusted gross revenue-related dues case.
While most of it is priced in, the impact on the Vodafone Idea stock will be marginally positive if the outcome of the case is in favour. However, if the outcome is unfavourable, it may have a major negative impact.
A report by Axis Securities said the Indian telecom industry is showing strong data consumption and demand for data continues to accelerate. "The tariff hike will help (average revenue per user) increase meaningfully, contributing to improved operating margins and enhanced free cash flow generation," it said. However, the decline in operating margins and subdued additions of net customer adds may weigh on the financials of these companies.
"The tariff hike will help to gain realisation and will not affect market share gains. The telcos will benefit from 2G to 4G conversion," Axis Securities said in the report. The conversion ratio needs to be watched for as fifth generation network adoption will help to gain average revenue per user. Further, any market share gain by Vodafone Idea will impact Bharti Airtel, and Reliance Jio will be another key stock to watch.
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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 | 1,506.75 | 1.60 | 1529.40 | 1468.10 |
| Mahanagar Telephone Nigam | 61.56 | 3.50 | 66.50 | 58.80 |
| Reliance Industries | 2999.95 | 1.50 | 3032.30 | 2980.70 |
| Tata Communications | 1906.90 | 2.30 | 1947.40 | 1880.70 |
| Tata Teleservices Maharashtra | 93.94 | 5.20 | 97.10 | 91.50 |
| Vodafone Idea | 15.82 | (-)0.40 | 16.60 | 15.40 |
| Nifty 50 | 24823.15 | 1.20 | 24904.50 | 24731.00 |
| S&P BSE Sensex | 81086.21 | 0.80 | 81415.20 | 80718.80 |
End
Reported by Anjali Singh
Edited by Deepshikha Bhardwaj
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