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Informist, Friday, Oct. 11, 2024

MUMBAI - Stock-specific action is expected in shares of telecommunication companies next week, analysts said. While analysts expect shares of Bharti Airtel and Reliance Industries to rise, Vodafone Idea is expected to fall further. Investors will be closely monitoring Reliance Industries, which is set to report its Jul-Sept earnings on Monday.

Prabhudas Lilladher expects the subscriber base of telecom companies to be muted in the September quarter, while Axis Securities sees a sequential decline. Since the revenue ramp-up from the tariff hike, undertaken in June, is expected to reflect in Oct-Mar, the outlook for the sector remains positive. "It usually takes a couple of quarters for the flow-through from hike to get fully reflected in the (average revenue per user)," Axis Securities said in a report this week.

"We still expect (Bharti Airtel and Bharti Hexacom) to report QoQ increase in 4G subsbase (user base) and RJio to see a decline, as its entire base is 4G," Axis Securities said. The brokerage expects their growth to revive as the initial shock from the hike fades. Further, the strong revenue growth for Bharti Airtel is expected in the near term on the back of higher customer retention. Prabhudas Lilladher sees the direct-to-home services and its investment in Airtel Africa, Indus Towers, and Bharti Hexacom to be favourable for the company. Shares of Bharti Airtel closed 0.6% higher at INR 1,687.40.

Reliance Indutries' consolidated net profit is expected to fall nearly 10% on an annual basis in the reporting quarter as weak refining margins may hurt the profitability of its oil-to-chemicals business, which is its largest segment. However, the consolidated net profit is seen rising on quarter on the back of tariff hikes undertaken in Reliance Jio at June-end. Shares of Reliance Industries closed marginally higher at INR 2,744.20.

For Vodafone Idea, analysts expect the loss of market share to continue in the near term. The structure of the stock is weak, and no sharp run-up is expected in the near-term, a technical analyst at a domestic brokerage said. The analyst also expects Indus Towers stock to remain rangebound in the upcoming sessions. Shares of Vodafone Idea lost 6.2% this week and closed 1.4% lower at INR 9.18.

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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:

End

Reported by Anjali Singh
Edited by Akul Nishant Akhoury

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