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Informist, Friday, Mar. 21, 2024

MUMBAI – Most telecom stocks are likely to move in a thin range next week while the overall market may continue its northward rally. However, shares of major players Bharti Airtel and Reliance Industries, the parent company of Reliance Jio Infocomm, may clock modest gains if the market sees a further rise next week, analysts said. The direction of the sector would be difficult to project until there are fresh triggers, such as the start of the March quarter earnings season, they said.

Average revenue per user of companies has grown substantially, but growth in this metric will be limited from now onwards, said Piyush Pandey, research analyst at Centrum Broking. The growth in telecom companies is mainly driven by a growth in average revenue per user. Telecom majors will have a chance to boost their average revenues per user only when tariffs are hiked, which is expected only by the end of 2025, Pandey said.

In a major development this week, media reports said the government was not considering any waiver on the adjusted gross revenue to telecommunication companies. The telecommunications department had proposed a relief package, including a 50% waiver on the interest component and a full waiver on penalties and interest on penalties, which was recently sent to the Cabinet Secretariat for review. Bharti Airtel and Vodafone Idea together owe around INR 1.20 trillion, the Hindu BusinessLine newspaper had reported Thursday. "People knew this would happen after the Supreme Court had rejected petitions by telecom majors earlier...this does not come as a shock," Pandey said.

Last week, both Bharti Airtel and Jio Platforms signed agreements to offer Starlink's broadband internet services in India, indicating that the Elon Musk-owned satellite internet company will not be a major threat to domestic telecom majors. Vodafone Idea is also in talks with Starlink for a similar pact, various media outlets reported. These developments gain significance as Starlink's promised foray into the Indian market was being viewed as a potential threat to existing players. But analysts had reassured that Starlink would not be a major competition for these established players as its services would most likely be offered at a much higher price point.

During the week, Bharti Airtel also said the company has made signficant investments for network expansion in Kerala and deployed 2,500 sites in the state over the past two years. The company's total site count in the state has risen to 11,000, the highest by any telecommunication operator.

TOP HEADLINES

* RailTel Corp gets INR 168.9-mln order from defence ministry
* Bharti Airtel says 2,500 telecom sites deployed in Kerala in last two years
* Tata Comm launches cloud fabric Vayu, to cut cos' cloud costs by 30%
* PRESS: Govt may not waive AGR dues; Bharti Airtel, Vodafone Idea to be hit
* Vodafone Idea confirms being in talks with Starlink, other Satcom players
* Vodafone Idea launches 5G services at competitive price in Mumbai

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 Akul Nishant Akhoury

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