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Informist, Friday, Apr. 11, 2025

MUMBAI – Shares of telecommunication companies are expected to move in a thin range next week ahead of their earnings for the March quarter. With the sector relatively insulated to reciprocal tariffs by the US, earnings would be the major trigger for these companies, analysts said.

"We maintain our positive stance on the telecom sector given the much-needed tariff hikes undertaken by the companies," Prabhudas Lilladher said in a report on Wednesday.

Bharti Airtel Ltd. is expected to report largely flat growth in earnings for the quarter as their average revenue per user will not grow much this time round, an analyst, tracking the sector at a domestic brokerage, said. The company's subscriber base would also only grow marginally for the quarter, as per the analyst.

The next tariff hike for telecom companies is likely to be towards the end of 2025, which is when its average revenue per user will again grow significantly, the analyst said. The company's average revenue per user is expected to grow just over 1% sequentially during the quarter, brokerage Prabhudas Lilladher said.  

Reliance Jio, a subsidiary of Reliance Industries Ltd., is also likely to report similar flat growth during the quarter, the analyst said. The company is still likely to see some benefits from its last tariff hike back in July. It is also likely to report higher subscriber growth than Bharti Airtel, the analyst quoted above said. The company's earnings before interest, taxes, depreciation, and amortisation is expected to grow nearly 2% sequentially due to a robust gain in subscribers, JM Financial said in a report on Apr. 4.

On Vodafone Idea, the analyst said while there will be no direct impact on the company due to the government converting its debt into equity, it will help free up cash flow for the company. Due to this, banks might be more willing to give loans to the company. Vodafone Idea's EBITDA is seen falling over 1% on quarter as the company had net lost 4.2 million subscribers during the quarter, JM Financial said. Growth in its average revenue per user is seen to be flat, the brokerage said.

On the tariffs front, India's telecom exports to the US are worth $6 billion annually, the Economic Times said, citing a report by EY. Despite the increased tariff, India remains competitive due to duties on countries such as China and Vietnam being even steeper, the report said. However, most of the $6 billion annual export figure reported by EY consists of telecom gear manufacturers and exporters, the analyst quoted above said. Telecom service providers will be largely unaffected by the tariffs, the analyst added. 

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* ICRA assigns 'BBB-' rtg to Vodafone Idea's long-term loans; outlook stable

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 Subhojit Sarkar

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