The shares of Vodafone Idea and Bharti Airtel have got wings according to recent data. Both companies reported record losses in the September quarter. Now the rise in the shares of both companies has surprised. The question is, are the telecom stocks good days back?
On Tuesday, the stock of Vodafone Idea jumped 26 percent. The stock has risen by 85 percent. Similarly, Airtel has registered a 20 percent strength. Both companies have announced to increase the rates of their mobile services from 1 December.
On November 14, Vodafone Idea shares were trading at a price of Rs 2.95. On Tuesday, November 19, the share price reached Rs 5.65. Bharti Airtel shares also rose 5.29 percent to Rs 430.80.
Vodafone Idea has said, “To continue good service to the customers, the company will increase the rates appropriately from December 1”. However, these debt-ridden telecom companies have not told how much they are going to increase the prices. Airtel had said on Monday that it is going to increase prices. A lot of capital is required in the telecom sector. Technology is changing rapidly. Due to this, there is a need for investment. This industry is also very important from the point of view of Digital India.
Saravan Kumar, CIO of Essel Mutual Fund, believes that the days of the telecom sector are changing. He said, “We think that quality telecom companies will do well. There has been a lot of upheaval in the sector for the last three years. But the government is also understanding that there are three-four big companies needed in the sector.”
Regarding the good performance of Bharti Airtel in the last one year, Senior Vice President of Sharekhan Hemang Jani told ET Now that the stock is climbing due to the improvement in ratings. He has increased the target price for Bharti Airtel to Rs 440. He has expressed confidence in the stock for the next two years. He said, “The government can give some relief to the telecom companies. They have to pay Rs 28,000 crore to the Department of Telecommunications.
Apart from this, both Vodafone and Airtel are thinking about increasing the price. The growth after several years is good news for companies. “
Author- Suvigya Jain Singhi is Charismatic and energetic legal advisor with eight years of career experience in business and legal environments.