Last week, the company reported a consolidated loss of Rs 50,921 crore .
NEW DELHI: Shares of beaten-down Vodafone Idea climbed as much as 32 per cent in Wednesday’s trade, extending its four-day rally to nearly 170 per cent. The stock hogged limelight after the company said it will raise mobile services rates from December 1 in the wake of the ongoing financial stress.
In another development, the country’s third-largest telecom service provider, is seeking about Rs 7,000 crore in tax refunds for past years even as it faces fresh statutory dues liability – running into thousands of crore – that has put the income tax department in a bind, PTI reported referring sources privy to the development.
The scrip hit an intraday high of Rs 7.93 in today’s trade against the close of Rs 2.95 on November 14. “To ensure that its customers continue to enjoy world-class digital experiences, Vodafone Idea will suitably increase the prices of its tariffs effective December 1, 2019,” Vodafone Idea on Monday said in a statement.
Last week, the company reported a consolidated loss of Rs 50,921 crore – the highest ever loss posted by any domestic company – for the second quarter ended September 30, on account of liability arising out of the Supreme Court order in the adjusted gross revenue case.
On the other hand, Bharti Airtel was up 3.11 per cent at Rs 452.95 in the early trade, taking its four-day gains to 26 per cent. Airtel on Monday also said that it will start raising rates for services in December to make the business viable.
Bharti Airtel remains the preferred bet to play the potential market repair (or consolidation), for now, Kotak Securities said.
On the other hand, shares of Reliance Industries also got traction in Wednesday’s session after its telecom arm Reliance Jio on Tuesday said it will also increase mobile phone call and data charges in the next few weeks in compliance with rules. Market capitalization of the company is just shy of Rs 10 lakh crore. The scrip was up 4 per cent at Rs 1,571.
Santosh Meena, Senior Analyst, TradingBells believes there is a rapid move in the sentiment in telecom from extreme pessimism to frenzy buying especially for Vodafone Idea and Bharti Airtel. Positive words by the finance minister that “I want no company to shut operations” was a major trigger for telecom stocks to rally whereas news of tariff hikes fuel the further bullish momentum in telecom stocks. The market is factoring that tariff rates in the telecom sector have bottomed out and it has bec ..
We are only bullish on Reliance Industries which will continue to remain a leader and its diversified business minimises any industry risk because in the telecom sector, there is always a regulatory overhang and there is always a risk of disruption due to technological changes,” said Meena.
On the other hand, Reliance Communications was down 3.45 per cent at Rs 0.56 per share.
