Telecom Stocks
Outlook for the week – 23 to 27.06.2014
(www.rupeedesk.in)
In absence of specific triggers for the sector, telecom
companies are likely track the broad
markets in their movement next week, However, few stocks are
seen gaining next week
as the telecom ministry, reportedly, has sought additional
funds of 69.97 bln rupees in the
budget for various projects that are to be rolled out during
the current financial year.
Telecom Minister Ravi Shankar Prasad is learnt to have
approached Finance Minister
Arun Jaitley for additional funds to carry out projects
committed under the Universal
Services Obligation Fund scheme. According to telecom
companies, Bharti Airtel is seen
gaining the most, followed by Idea Cellular and Reliance
Communications. Telecom
stocks look strong for the next few weeks as the robust
subscriber addition continues this
month also.
While the current market stability continues to bode well
for incumbents, R-Jio's launch
remains a key event risk to watch out for. Given that R-Jio
is planning to target ruralareas too, aggression in the form of pricing or
subsidies can't be ruled out-however, based
on today's speech, material impact on incumbents, if any, is
likely to kick in during
FY16F or beyond. We would continue to monitor these
developments.
