Telecom Stocks Outlook for the week – 07 to 11.Jul.2014

Telecom Stocks Outlook for the week – 07 to 11.Jul.2014

Stocks of major telecom companies are likely to pick cues from the General Budget, which
will be tabled on Jul 10, to chart their movement next week. We expect the stocks of major
telecom firms such as Bharti Airtel, Idea Cellular and Reliance Communications to remain
range-bound. Reliance Communications, the only telecom stock that failed to exhibit a
positive change from the week ending Jun 27 is likely to gain. The Budget may give some
impetus to the telecom companies in the long term.

In a pre-budget note, Dun & Bradstreet said it expects rationalisation of taxes and levies in
the sector, which currently amount to nearly 30% of the revenues of telecom companies as
against 5% in other countries in Asia-Pacific. Besides, an early finalisation of spectrum
trading guidelines would augur well for the sector.

If the Budget grants infrastructure sector status and tax holiday, especially for tower
companies, then there would be a 15-25% earnings upgrade for tower companies like Bharti
Infratel. We expect some moderation in q-o-q (quarter on quarter) voice volume growth.
Bharti Africa and Bharti Infratel will likely have a subdued quarter.

Telecom Stocks Outlook for the week – 23 to 27.06.2014

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.

Telecom Stocks Outlook for the week – 09 to 13.Jun.2014

Telecom Stocks Outlook for the week – 09 to 13.Jun.2014

(www.rupeedesk.in)

Major telecom stocks are expected to consolidate their gains next week and trade with a

positive bias. Broad market is also expected to trade with a bullish bias next week after it

touched new lifetime highs yesterday, with the National Stock Exchange's 50-stock Nifty

ending at a record closing level of 7583.40, up 109.30 points or 1.5%, after hitting a

lifetime high of 7592.70 points intraday.

Trend for Idea Cellular is seen bullish next week, after a successful Qualified Institutional

Placement by the company, which was subscribed 1.5 times, with the company raising 30

bln rupees, according to reports. The stock is seen gaining as much as 145 rupees, with

the potential of reaching further highs.

Telecom Stocks Outlook for the week – 26 to 30.05.2014

Telecom Stocks Outlook for the week – 26 to 30.05.2014

(www.rupeedesk.in)

Telecom stocks are expected to trade in the green next week as the broad

market is seen scaling new highs with the National Stock Exchange's 50-stock Nifty

likely to surpass the 7500 mark. Yesterday, Nifty ended at a record closing level of

7367.10, up 90.70 points or 1.2% from Thursday.

With the equity market reaching new highs aided by inflows from foreign institutional

investors, the Indian rupee has also strengthened against the US dollar. So far in May, the

rupee has appreciated 3.06% against the dollar. Yesterday, the rupee ended at 58.52

against the dollar. The strengthening of the rupee will provide cushion to the balance

sheets of telecom companies, some of which have significant dollar debt exposure.

The telecom sector is likely to take a breather with appreciation of rupee as all the three

listed companies, especially Bharti and RCOM (Reliance Communications) have huge

foreign debt. As a result, a strong local currency may lead to lower interest and

installment outgo for this company. With this, we remain positive on the sector for near

to medium term.