Telecom Stocks Outlook
Bharti Airtel poised to gain; Vodafone Idea seen weak
This story was originally published at 06:00 IST on 5 October 2024
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MUMBAI - Shares of Bharti Airtel are well placed and poised to rise next week following sharp losses seen last week, according to two analysts at different domestic brokerage firms. Meanwhile, shares of Vodafone Idea and Indus Towers are seen extending their losses as they are "structurally weak," Jatin Gedia, technical research analyst at Sharekhan said.
Earlier this week, Bharti Airtel had said it prepaid INR 84.65 billion to the Department of Telecommunication to clear high-cost deferred liabilities for the spectrum it acquired in 2016. The liabilities carried an interest rate of 9.3%.
Vodafone Idea and Bharti Airtel reached out to the government after the Supreme Court in September rejected a batch of curative petitions filed by telecom companies against the court's earlier order on adjusted gross revenue calculations. "The telecom companies seek some relief, but it is very unlikely that the central government will totally do away with or waive the dues," a research analyst covering the sector said. The government will likely come out with some other plan, but it will take months.
The petitions arise from an order by the top court in 2020 that granted 10 years to telecom companies to clear their adjusted gross revenue dues to the Department of Telecommunications. The apex court had asked telecom companies to pay 10% of the adjusted gross revenue dues upfront.
Going forward, a near-term trigger for these companies is the revenue ramp up after the much-awaited tariff hike in July. The impact of the tariff hikes is expected to be reflected in the revenue after a couple of quarters. Investors keenly await Vodafone Idea to raise bank debt that it has been planning for, the analyst said.
TOP HEADLINES
* RailTel Corp gets INR 678-mln order from Bangalore Metro Rail Corp
* Bharti Airtel prepays INR 84.65 bln for deferred spectrum liabilities
* RailTel Corp gets work order worth 1.34 bln rupees from Adani Connex
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 | 1,640.90 | (-)5.40 | 1709.10 | 1596.00 |
| Mahanagar Telephone Nigam | 54.84 | 3.60 | 60.60 | 51.60 |
| Reliance Industries | 2773.05 | (-)9.20 | 2861.60 | 2719.30 |
| Tata Communications | 2082.05 | (-)2.10 | 2189.50 | 2018.50 |
| Tata Teleservices Maharashtra | 81.45 | (-)4.20 | 85.30 | 77.60 |
| Vodafone Idea | 9.79 | (-)8.20 | 10.30 | 9.40 |
| Nifty 50 | 25014.60 | (-)4.50 | 25673.70 | 24637.20 |
| S&P BSE Sensex | 81688.45 | (-)4.50 | 84032.10 | 80360.80 |
End
Reported by Anjali Singh
Edited by Deepshikha Bhardwaj
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