Telecom Stocks Outlook
May remain in thin range next wk; sentiment subdued
This story was originally published at 21:50 IST on 8 November 2024
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MUMBAI - Shares of telecommunication companies are likely to move in a thin range next week, mirroring benchmark indices, as sentiment remains subdued due to expensive valuations and a slowdown in earnings growth, analysts said. Benchmark Indices are seen moving in a thin range as major triggers such as the monetary policy outcomes of two major global central banks and the US presidential elections are behind, they added.
A key event for the sector next week is the quarterly earnings of Vodafone Idea. Kotak Institutional Equities expects Vodafone Idea's revenue for Jul-Sept to grow 7% sequentially. This would be due to an uptick in average revenue per user on the back of tariff hikes, taken earlier this year, but it will be partially offset by a continued decline in subscribers, the report said. The average revenue per user may increase 9% sequentially to INR 159/month on tariff hikes and continuing subscriber mix improvement, it said.
Shares of Bharti Airtel have lost nearly 3% this week, while those of Vodafone Idea have lost nearly 7%. Talking about the sector, Vinit Bolinjkar, head of research at Ventura Securities, said other telecom players such as HFCL and Tejas Network are better placed. "(HFCL) is becoming more of a defence player, and he's also getting into telecom products. Optic fiber is getting a lot of traction," he said.
Reliance Jio Infocomm, another major telecom player in the country, is also under pressure as it lost a number of subscribers recently. As the tariff hike was already taken this year, the company is not expected to take another hike for some time. This, coupled with a continued loss of subscribers, is a concern for the company. The company net lost 4.02 million wireless users in August, way higher than the 758,463 users lost in July.
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* RailTel Corp gets INR 1.70 bln order from EPFO for creation of supply, svcs
* ITI consortium emerges lowest bidder for INR 30.22-bln BharatNet project
* Bharti Telecom buys additional 1.2% stake in Bharti Airtel
* Rail Vikas-led consortium lowest bidder for INR 19.17-bln BSNL contract
* Bharti Airtel partners with Indian Army to launch network in Galwan
* Rail Vikas-led consortium lowest bidder for INR 50.08 bln contract from BSNL
* Route Mobile, Billeasy to launch online ticketing svcs for Hyderabad Metro
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 | 1,569.90 | (-)2.90 | 1590.10 | 1548.80 |
| Mahanagar Telephone Nigam | 48.57 | (-)0.90 | 51.10 | 47.00 |
| Reliance Industries | 1283.75 | (-)4.10 | 1313.50 | 1260.20 |
| Tata Communications | 1774.65 | (-)0.90 | 1830.20 | 1738.20 |
| Tata Teleservices Maharashtra | 70.89 | (-)5.10 | 73.70 | 69.00 |
| Vodafone Idea | 7.88 | (-)6.80 | 8.10 | 7.70 |
| Nifty 50 | 24148.20 | (-)0.60 | 24373.20 | 23954.20 |
| S&P BSE Sensex | 79486.32 | (-)0.30 | 80160.20 | 78780.40 |
End
Reported by Anjali Singh
Edited by Deepshikha Bhardwaj
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