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Informist, Friday, Apr. 25, 2024

MUMBAI – Telecom sector stocks are seen trading range-bound next week and movement in prices will mainly be stock-specific. Investors will eye the March quarter earnings of major players. Reliance Industries, which houses Reliance Jio Infocomm, announced their earnings earlier Friday.

Going forward, Bharti Airtel will report its earnings on May 13, while Vodafone Idea is yet to announce their earnings date. 

Bharti Airtel looks positive on the technical charts and might see buying near the INR 1,780 levels, Jatin Gedia, technical research analyst at Mirae Asset Sharekhan, said. The stock ended down 1.5% at INR 1,817.20 on Friday. Shares of the company fell nearly 4% in the week, having gained for seven straight weeks prior to that. The stock had gained 20% in the seven-week period.

On the other hand, Vodafone Idea may fall to the INR 7.0-INR 6.5 levels in the near term, Gedia said. The stock fell almost 6% to INR 7.47 on Friday, but still ended the week nearly 3% higher.

This week the subscriber data for January and February was released by the Telecom Regulatory Authority of India. For January, Bharti Airtel was the biggest winner with a net addition of 1.65 million users, followed by Reliance Jio with 686,143 users. In February, Reliance Jio led after net adding 1.77 million users, followed by Bharti Airtel that gained 1.59 million mobile users. Vodafone Idea lost subscribers in both the months.

The subscriber addition data for January was muted due to SIM consolidation in the lower average revenue per user segment on account of the tariff hike in July last year, JM Financial said in a report. "...the industry's active subs grew by a robust 4.7 mln in Jan, driven by Bharti/BSNL, partly offset by VIL's (Vodafone Idea) active subs loss while Jio's active subs addition was muted," the report said.

Bharti Airtel strengthened its leadership position in the machine-to-machine segment with a 52.4% subscriber market share, up from 50.9% in December, the report said. Reliance Jio's subscriber market share in the segment was largely steady at 17.4%. Vodafone Idea's market share declined to 25.1% in the month from 26.2% in December.

On the earnings front, Tata Communications and Tata Teleservices (Maharashtra) reported their earnings for the March quarter this week. Tata Communications Tuesday reported robust earnings for the March quarter, with both the bottom line and top line beating analysts' expectations. The company's bottom line rose over four times sequentially, boosted by a one-time income of INR 5.78 billion. The one-time income is from the net proceeds of INR 6.60 billion from the sale of its properties, including one in Ambattur, Chennai, the company had said. 

"...(the company) is making good progress on data/digital growth, but the path to INR280bn data revenue aspiration by FY27 is getting steeper," Nuvama Institutional Equities said in a report Wednesday. "We are now assuming it shall achieve the FY27 revenue target in FY28," the brokerage said. The stock fell 1% post its earnings but still ended the week slightly higher. 

Tata Teleservices's net loss for the quarter shrunk a bit to INR 3.06 billion from INR 3.15 billion a quarter ago. Its revenue fell sequentially to INR 3.08 billion from INR 3.33 billion. The stock fell over 1% this week.

Reliance Industries reported its quarterly earnings earlier in the day with Jio Platforms' vertical reporting higher revenue as well as operating profit. The impact of tariff hikes for mobility services and growth in homes and digital services businesses drove its performance.

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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 Vandana Hingorani

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