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Telecom stocks rally: Vodafone Idea surges nearly 100%, Airtel jumps 20% in 3 days

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Telecom stocks rally: Vodafone Idea surges nearly 100%, Airtel jumps 20% in 3 days

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Telecom stocks Vodafone Idea and Bharti Airtel have been on the rise since CNBC-TV18 reported on November 15 that the committee of secretaries (CoS) is mulling setting a minimum price for mobile calls and data usage.

Telecom stocks rally: Vodafone Idea surges nearly 100%, Airtel jumps 20% in 3 days
Telecom stocks Vodafone Idea and Bharti Airtel have been on the rise since CNBC-TV18 reported on November 15 that the committee of secretaries (CoS) is mulling setting a minimum price for mobile calls and data usage.
While Bharti Airtel has risen as much as 20 percent in three days, Vodafone Idea has surged 96.6 percent during this period.
Last week, CNBC-TV18 reported that the committee of secretaries is mulling setting a minimum price for mobile calls and data. The CoS has sought recommendations from the Department of Telecom (DoT) on setting a minimum charge for all tariffs for telecom players and also assessing the impact it will have on telecom operators.
Both stocks also rose on Tuesday after the firms announced intent to hike mobile call and data tariffs from December. The two companies said that they need to hike tariffs for the viability of operations. The telecom operators, however, did not disclose further details about the tariffs.
While Airtel rose 6.5 percent on Tuesday, Vodafone Idea rallied 29.7 percent during the day.
For Q2 both the telecom operators reported their highest ever quarterly loss. Vodafone Idea reported a consolidated net loss of Rs 50,921 crore for Q2FY20—the highest ever quarterly loss reported by an Indian company. Bharti Airtel posted a quarterly loss of Rs 28,450 crore. The losses stemmed from provisions set aside by the two firms for unpaid government dues after the Supreme Court ruled in favour of the government in the adjusted gross revenues (AGR) case.
However, most analysts do not suggest buying these stocks as of now. Nilesh Shah, managing director and CEO of Envision Capital, has advised investors to avoid telecom stocks, saying that there were no reasons to be invested in the sector.
G Chokkalingam, founder and managing director of Equinomics Research and Advisory also said that he would not buy the telecom stocks at this point in time but would rather wait.
Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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