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Last Updated : Nov 15, 2019 03:16 PM IST | Source: Moneycontrol.com

BSE Telecom index jumps 8% after reports of govt panel mulling floor price for calls, data

The BSE Telecom index jumped 8 percent in intraday trade so far, supported by gains in shares of Bharti Airtel, Bharti Infratel and Vodafone Idea.

Most telecom stocks traded in the positive territory on November 15, keeping the sectoral index up with strong gains, a day after the telecom majors Bharti Airtel and Vodafone Idea had reported a whopping cumulative loss of Rs 74,000 crore for the second quarter of the financial year.

The BSE Telecom index jumped 8 percent in intraday trade so far, supported by gains in shares of Bharti Airtel, Bharti Infratel and Vodafone Idea.

Around 11:40 hours IST, the telecom pack was 5.42 percent up, with seven stocks in the green and six in the red. The benchmark Sensex was 0.43 percent up at that time.

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Telecom stocks saw the traction after sources had said that the panel of committee of secretaries (CoS) was mulling floor price on data and voice tariffs and had sought recommendations from Department of Telecom (DoT) on setting a minimum charge for all tariffs for telecom players while assessing the impact it would have on telecom operators, CNBC-TV18 reported.

Industry observers and market experts said this move would be a relief for incumbents like Vodafone Idea and Bharti Airtel who were experiencing acute pressure on their books after the Supreme Court had asked telecom companies to pay Rs 92,000 crore to the government as Adjusted Gross Revenue (AGR).

The report from CNBC TV18 further said that DoT would begin consultation on the floor price for voice and data with telecom companies soon.

Vodafone Idea share price jumped 10 percent intraday while those of Bharti Airtel and Bharti Infratel jumped 9 percent and 8 percent, respectively, in the intraday trade on BSE so far.

UBS has maintained a buy call on Bharti Airtel with a target of Rs 415 per share as the company accelerated investment in 4G. Excluding one-offs, the company reported a net loss of Rs 1,100 crore. The firm is of the view that Bharti Airtel has defended a solid market share backed by a strong spectrum bank.

On the other hand, Credit Suisse has maintained a neutral call on Bharti Airtel but has raised the target to Rs 380 from Rs 370 per share. EBITDA of 6 percent was ahead of estimates due to beat in India mobile business. The firm is of the view that regulatory headwinds are likely to remain an overhang in the near-term.

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First Published on Nov 15, 2019 12:16 pm
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