Bharti Airtel share price rose 2% to hit a new high of Rs 684 apiece in intraday deals on Wednesday, ahead of the Cabinet meet scheduled later today.
Bharti Airtel share price rose 2% to hit a new high of Rs 684 apiece in intraday deals on Wednesday, ahead of the Cabinet meet scheduled later today. Similarly, Vodafone Idea shares surged 7.5 per cent to Rs 8.90 apiece. The Union Cabinet is expected to take up the department of telecommunications’ (DoT’s) proposal for offering a relief package to the telecom industry at its meeting on Wednesday, sources told the Financial Express.
Telecom stocks have been rallying for the last two days on expectations of the announcement of a relief package for the sector. Analysts say the relief package announcement will be a positive trigger for the entire telecom sector as well for some of the banking stocks such as IDFC First Bank, IndusInd Bank, and State Bank of India (SBI).
Bharti Airtel stock has gained 3.15 per cent so far this week, and Vodafone idea has rallied 22.5 per cent. “Vodafone Idea may witness big swings due to its high beta nature but the situation is still vulnerable for this counter as there is a good chance that this sector is heading towards duopoly therefore investors are advised to remain with the top two players. The ARPU has bottomed out and is likely to continue its upside momentum therefore the outlook for this sector is bullish where Reliance Industries and Bharti Airtel both are a good bet to play the growth of this sector,” Santosh Meena, Head of Research, Swastika Investmart, said.
On the contrary, Reliance Industries Ltd (RIL) shares were trading in the red. Motilal Oswal Financial Services has given a ‘buy’ rating to RIL stock. “Despite the impact of the second COVID wave, RJio held its ground and was able to garner a healthy gross/net subscriber addition rate,” it said.
Bharti Airtel’s capital raising may have a negative impact in the short term, since it is unexpected as they have mentioned that their leverage and liquidity situation is stable, but company has strategically beaten JIO, their biggest rival, and has been able to attract a greater number of subscribers as compared to their rivals, said an analyst. Bharti Airtel is also going aggressive in making an ecosystem like Airtel Xstream fiber for their subscribers by giving lucrative offers for faster internet. “We believe that in the long run Bharti Airtel is going to do well and we recommend that investors should hold the stock for gains in the long term,” Ashis Biswqas, Head of Technical Research at CapitalVia Global Research, told Financial Express Online.