Telecom Stocks Outlook
Stock-specific action likely next week
This story was originally published at 19:35 IST on 29 November 2024
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MUMBAI - Stock-specific action is likely for stocks of telecommunication companies next week, analysts said. Shares of Bharti Airtel and Vodafone Idea are likely to build on the gains recorded this week. Multiple reports by brokerages this week also hinted at a positive outlook for the sector in the coming quarters.
Fitch Ratings Thursday said in a report that it does not expect telecom companies to hike tariffs in the short term after already undertaking a hike in July, as it expects customers to shift from prepaid plans to postpaid ones, and upgrade to higher-priced data plans. This will boost the telecom companies' average revenue per user. The average revenue per user of Bharti Airtel, Vodafone Idea, and Reliance Jio Infocomm grew sequentially and annually in the September quarter. Analysts do not expect another tariff hike anytime soon as it takes some time for hikes to reflect in the financials of these companies.
Shares of Bharti Airtel closed 4.3% on Friday and gained nearly 4% this week. The rise on Friday was on the back of bullish views by ICICI Securities, which upgraded the stock to 'buy' from 'add', and its valuation re-rating is supported by solid fundamentals. The brokerage expects its fundamentals to improve, helping the company sustain valuations in the base case or, could enable further re-rating.
Further, shares of Vodafone Idea are likely to extend gains after media reports said the Union Cabinet has approved a proposal to waive the bank guarantee for spectrum purchases before 2022. The update was sentimentally positive for the stock, an analyst who covers the sector at a domestic brokerage said. The stock closed flat at INR 8.4 on the NSE.
TOP HEADLINES
* See no near-term tariff hike by telcos; postpaid plans to drive ARPU - Fitch
* RailTel Corp gets INR 152.13-mln order from Kakinada Smart City Corp
* Vodafone Idea says not got any intimation from govt on bk guarantee waiver
* S&P revises Bharti Airtel's outlook to 'positive', reaffirms 'BBB-' rating
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 | 1,627.15 | 3.70 | 1706.80 | 1511.30 |
| Mahanagar Telephone Nigam | 48.54 | 13.00 | 50.90 | 46.80 |
| Reliance Industries | 1292.20 | 2.10 | 1313.20 | 1264.70 |
| Tata Communications | 1755.10 | 1.00 | 1777.70 | 1717.90 |
| Tata Teleservices Maharashtra | 78.74 | 17.80 | 82.80 | 75.80 |
| Vodafone Idea | 8.36 | 25.30 | 8.70 | 7.90 |
| Nifty 50 | 24131.10 | 0.90 | 24343.50 | 23820.90 |
| S&P BSE Sensex | 79802.79 | 0.90 | 80482.00 | 78686.60 |
End
Reported by Anjali Singh
Edited by Tanima Banerjee
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