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Informist, Friday, Feb. 7, 2025

MUMBAI – Telecom stocks will consolidate on the back of strong earnings for the December quarter by Bharti Airtel Ltd. However, the sector will continue to do well in the long term due to strong fundamentals, Piyush Pandey, research analyst at Centrum Broking said.

Major players in the sector will also raise tariffs at regular intervals amid a lack of competition across the sector, which will further boost earnings in the future, Pandey said. "Currently, the telecom market is very concentrated with the likes of (Bharti) Airtel, (Reliance) Jio, and Vodafone (Idea) dominating, whereas earlier there was cut-throat competition in the sector with 5-10 major players," Pandey said. This lack of competition gives telecom companies more leeway to hike tariffs frequently, the analyst said. 

Bharti Airtel Ltd.'s consolidated net profit for the December quarter surged almost four times sequentially to INR 147.81 billion, powered by a one-time gain of INR 75.46 billion from the Indus Towers consolidation, effective Nov. 19. The stock rose more than 3% after earnings Friday. 

While the performance for the December quarter was strong, led by an increase in average revenue per user and customer additions in the quarter, the revenue and the earnings before interest, taxes, depreciation, and amortisation were largely in line with expectations, Pandey said. The average revenue per user, a key performance metric for telecom companies, rose to INR 245 in the latest quarter from INR 208 in the year-ago period. 

Meanwhile, Vodafone Idea will report its earnings for the quarter Tuesday. The company's consolidated net profit is expected to shrink more than four times to INR 71.80 billion. The company's ARPU and customer base are also expected to decline, Pandey said. 

Earlier in the week, telecom operators had opposed the Telecom Regulatory Authority of India's guidelines that public data offices cannot exceed twice the tariff for retail broadband services, arguing that it fails to distinguish between retail broadband services and public data offices, which have different usages. 

TOP HEADLINES

* 3M India Oct-Dec net profit falls 15.9% on year to INR 1.14 billion
* Earnings Review: Bharti Airtel consol sales meet Street view; PAT up sharply
* Earnings Review: Exceptional loss drags down Bharti Hexacom's Oct-Dec PAT
* RailTel Corp bags INR 497-mln order for video surveillance system
* HFCL Oct-Dec consol PAT falls 0.3% QoQ, sales decline 7.5%
* Earnings Outlook:Bharti Airtel may see India mobile sales momentum slow down

Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:

End

Reported by Akash Mandal

Edited by Deepshikha Bhardwaj

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