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Informist, Friday, May. 23, 2025

MUMBAI – Stocks in the telecommunications sector are likely to move in a thin range next week with specific news and events deciding market direction, analysts said. Vodafone Idea is the only company in the sector, and among the only two companies in the Nifty 200, to have not yet announced the date for releasing the March quarter earnings.

Ratings agency ICRA revised its outlook for India's telecom tower industry to ‘stable' from ‘negative' after a steady improvement in payments from telecom companies, which has helped reduce delays in receiving dues, the Financial Express reported Tuesday. Timely payments from major clients and clearance of past dues have shortened the industry's receivables cycle to around 45-60 days from 80 days, the ratings agency said. This, in turn, led to improved liquidity and cash flow for these companies, reducing their dependence on external debt, it said.

"Improvement in the credit profile of some key telecom service providers has eased the working capital cycle of tower companies...technology upgrade to 5G and revived capex plans of some customers bring a favourable demand outlook for tower companies," the report quoted Ankit Jain, vice president and sector head of corporate ratings at ICRA, as saying. Jain said he expects annual capital expenditure in the range of INR 100 billion-INR 110 billion for the industry in 2025-26 (Apr-Mar), he said. ICRA expects a 4-6% growth in operating income for the telecom tower sector in FY26, the report said.

In terms of specific stocks, Bharti Airtel may keep consolidating in the range of INR 1,780-INR 1,900 next week as the industry awaits fresh cues, said Kshitija Salvi, technical research analyst at IDBI Capital Markets & Securities. However, if the overall market gains further, the stock might even test its all-time high of INR 1,917 due to the robust fundamentals of the stock, she said. Friday, shares of the company ended flat at INR 1,831.70 on the National Stock Exchange.

On other hand, Vodafone Idea continues to look weak and may fall to the INR 6 levels in the near term, Salvi said. Friday, the stock ended slightly higher at INR 6.76. The beleaguered telecom major was the worst hit after the Supreme Court Monday rejected petitions by Bharti Airtel, its subsidiary Bharti Hexacom, and Vodafone Idea, seeking a waiver of adjusted gross revenue dues towards interest, penalty and penalty on interest. Bharti Airtel and Bharti Hexacom had sought waiver of INR 347.45 billion in adjusted gross revenue-related dues, while Vodafone Idea wanted a waiver of INR 454.57 billion.

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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 Akul Nishant Akhoury

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