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Informist, Friday, Feb. 28, 2024

MUMBAI – Though it is difficult to predict the movement of stocks in the telecommunications industry given the volatility in the market, analysts say the near-term outlook for the sector is positive as the average revenue per user of telecom companies is expected to rise in the March quarter. The recently concluded Kumbh Mela in Prayagraj, Uttar Pradesh, boosted the industry with over 20 million users connecting daily through mobile phones, according to a BW BusinessWorld report. The country's top telecom companies may see a rise in average revenue per user in the fourth quarter on the back of this event, the report said.

"The huge crowds may have led to an increase in data top-ups, which is a positive for the companies," Piyush Pandey, equity research analyst at Centrum Broking, said. The telecom companies are also expected to raise tariffs by the end of the year, Pandey said.

The average revenue per user of telecom companies is expected to grow at a compounded annual growth rate of 11-12% in the next 3-4 years owing to the consolidated structure of the industry, JM Financial said in a report earlier this week. The brokerage expects the industry to achieve an average revenue per user of INR 280-310 in the next 3-4 years. Currently, Bharti Airtel is the industry leader with an average revenue per user of INR 245 in the December quarter, while Vodafone Idea is the laggard with INR 173.

The managements of both Bharti Airtel and Reliance Jio Infocomm have said capital expenditure is expected to moderate from the financial year 2024-25 (Apr-Mar) with their pan-India rollout of fifth generation networks completed, JM Financial said. These companies, alongside Bharti Hexacom, are likely to get to a net cash position by FY29 or FY30, the brokerage said.

Bharti Airtel ended the week over 4% lower, its second straight week of decline. The stock has declined over 8% in this period. Shares of Reliance Industries, parent company of Reliance Jio Infocomm, ended the week slightly lower. Shares of Vodafone Idea ended the week down over 6%. The stock has fallen for four straight weeks now, declining over 21% in this period.

TOP HEADLINES

* Bharti Airtel, Tata group in talks to explore direct-to-home business merger
* RailTel Corp consortium get INR 1.11-bln order from South Central Railway
* Bharti Airtel,  Ericsson expand partnership for advanced 5G core solutions
* PRESS: Bharti, Tata groups to merge Airtel Digital TV and Tata Play
* Bharti Airtel partners with Apple to offer Apple TV+, Apple Music to users
* RailTel Corp gets INR 2.88-bln order from East Central Railway
* Bharti Airtel arm to raise stake in Airtel Africa by acquiring up to 5% more

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

End

Reported by Akash Mandal

Edited by Rajeev Pai

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