Despite delay in tariff hike Analysts positive on telecom service providers


Published On: Friday, March 26, 2021 | By:

Despite delay in tariff hike Analysts positive on telecom service providers

A delay in tariff hike by telecom services providers Bharti Airtel, Vodafone Idea (Vi), and Reliance Jio (a subsidiary of Reliance Industries) has not yet turned analysts cautious on the sector. On the contrary, the underperformance of Bharti Airtel and Vi at the bourses, relative to the benchmark S&P BSE Sensex and S&P BSE Telecom indices on a year-to-date (YTD) basis, can be used as an opportunity to enter these stocks from a long-term perspective, analysts say. So far in the calendar year 2021 (CY21), the stock of Bharti Airtel has risen 2.8 percent on the BSE while Vi has declined 8 percent. Peer firm Reliance Industries’ stock that now is seen by analysts as a play both on telecom and oil, on the other hand, has risen 3.2 percent, ACE Equity data show. In comparison, Sensex and BSE Telecom indices are up 2.9 percent and 4 percent, respectively during the period.

Some analysts, believe that the sector still remains resilient. “While potential increase in average revenue per user (ARPU) remains a key trigger for Vi, correction from recent highs makes Bharti Airtel attractive. Therefore, Vi investors can stay put in the stock for now, new investors can put in money in Bharti Airtel,” they opined.

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