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Informist, Friday, Feb. 21, 2025

MUMBAI - The absence of key near-term triggers for the telecommunications sector is likely to keep shares of companies in a tight range next week, two derivatives analysts at domestic broking firms said. With the December quarter earnings season over, investors will closely watch for news flows related to the companies in the telecom space. An analyst tracking the sector at a domestic broking firm said that likely increase in tariffs in the medium term would help telecom companies to report better earnings growth.

Some listed players had hiked their tariffs in the middle of 2024, which had led to outflow of some customers to their unlisted peer Bharat Sanchar Nigam. However, raising tariffs led to better operating margins and earnings performance in the December quarter, making it among the top best sectoral performers. The last time the industry had implemented a tariff hike was in November 2021 and December 2019. The telecommunication sector beat the Street's estimates by a significant margin, with the cumulative net profit of five listed players more than INR 52 billion against estimates of over INR 5 billion, according to an analysis by Informist.

In a post-earnings report, Centrum Broking said that Bharti Airtel is its top pick from the sector. The company had the highest average revenue per user of INR 245 in Oct-Dec and Vodafone Idea had the lowest at INR 163. Reliance Industries' Jio had the highest number of wireless subscribers of 482 million, followed by Bharti Airtel at 357 million subscribers, and Vodafone at 200 million users.

Investors will also closely watch for news flows related to Elon Musk's Starlink which has been making efforts to enter the Indian telecom market. Citing officials, The Economic Times reported that the US-based company is set to get the approval of the Indian space regulator shortly and the company has submitted the necessary details for its clearance. Earlier, there were concerns that Starlink's entry would increase competition for Indian telecom companies. However, some analysts had said that Starlink's prices would be much higher than what the Indian peers provide, in which case there should not be major worries. 

Musk would require an operator's licence from the Department of Telecommunications and spectrum to begin its broadband services in India, the report said. Musk-owned Tesla is also expected to enter the Indian automobile market this year and may set up manufacturing plants, reports said.

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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 Anjana Therese Antony
Edited by Ashish Shirke

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