Bharti Airtel, Idea Cellular, Tata Comm hit 52-week lows

Idea Cellular, Tata Communications and Bharti Airtel were down in the range of 3% to 6%, as compared to 0.32% rise in the S&P BSE Sensex at 11:17 am.

Shares of telecom services providers (telcos) are under pressure with all major listed stocks – Bharti Airtel, Idea Cellular and Tata Communications – hitting their respective 52-week lows on the BSE, on concerns of weak earning in June quarter (Q1FY19).

Idea Cellular (down 6% to Rs 49.50), Tata Communications (5% at Rs 543) and Bharti Airtel (3% at Rs 331) were down in the range of 3% to 6%, as compared to 0.32% rise in the S&P BSE Sensex at 11:17 am.

In past one month, these three stocks have fallen in the range of 10% to 20% against 3% rise in the benchmark index.

According to Motilal Oswal Securities, the spillover of the fresh round of undercutting by operators from 4QFY18 to 1QFY19 continued to take a toll on telcos’ revenue.

Further, consolidation in the telecom sector had fuelled the exit of tenancies, leading to higher tenancy cost per operator. This, coupled with installation of cell sites on fresh towers (non-loading) and soaring diesel prices, is expected to increase the QoQ network cost for all operators, the brokerage firm said in Q1FY19 results preview.

Continued hyper competitive environment and down trading along with full quarter impact of international interconnection usage charge (IUC) cut would lead to decline in mobility revenues for another quarter. Pain for the quarter would increase with rise in network opex, driven by aggressive broadband sites rollout and rise in diesel prices, Emkay Global Financial Services said in results preview.

Continued off-take of bundled plans and enhanced discounts would lift both voice as well as data volumes. EBITDA for both, Bharti and Idea would continue on the downward spiral, it added.

COMPANY	LATEST	ONE-MONTH BEFORE	LOSS(%)
IDEA CELLULAR	49.95	62.25	-19.76
REL. COMM.	12.79	15.15	-15.58
BHARTI AIRTEL	333.75	371.25	-10.10
TATA COMM	545.20	605.80	-10.00