Bharti Airtel, RIL trade higher after TRAI releases telecom subscription data; Vodafone Idea slips over 3%

As per TRAI data, a total of 26.7 lakh customers were added in July, wherein Reliance Jio, the telecom arm of RIL, added 39.1 lakh customers against 22.7 lakh in June, Bharti Airtel added 15.2 lakh customers against 14.1 lakh month-on-month (MoM). On the contrary, Vodafone Idea lost 13.2 lakh customers during the month.

Reliance Jio's market share increased from 38.35 per cent in June to 38.6 per cent in July, image- Reuters

Bharati Airtel and Reliance Industries (RIL) edged higher in the morning trade on Thursday, September 28, whereas Vodafone Idea fell over 3 per cent. The stocks reacted to the telecom subscription data released by the Telecom Regulatory Authority of India (TRAI) on Wednesday.

At around 9:50 a.m. on the BSE, shares of Bharti Airtel traded 0.22 per cent higher at Rs 921.6 apiece and Reliance Industries shares traded 0.05 per cent higher at Rs 2,370.35.

On the other hand, shares of Vodafone Idea traded 2.75 per cent lower at Rs 11.68 apiece.

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As per TRAI data, a total of 26.7 lakh customers were added in July, wherein Reliance Jio, the telecom arm of RIL, added 39.1 lakh customers against 22.7 lakh in June, Bharti Airtel added 15.2 lakh customers against 14.1 lakh month-on-month (MoM). On the contrary, Vodafone Idea lost 13.2 lakh customers during the month.

The subscriber base of Vodafone Idea declined for the 28th consecutive month, and the company's market share declined over 20 per cent for the first time. Vodafone Idea's market share decreased from 20.08 per cent to 19.92 per cent MoM.

Meanwhile, Reliance Jio's market share increased from 38.35 per cent in June to 38.6 per cent in July, and Bharti Airtel's market share increased from 32.68 per cent to 32.74 per cent MoM.

Further, the data suggested that a total of 11,462.5 lakh subscribers were added at the end of July against 11,435.8 subscribers in June, thereby registering a monthly growth rate of 0.23 per cent.

Individually, Reliance Jio's wireless subscribers increased by 0.89 per cent to 39,07,320, Bharti Airtel wireless users increased by 0.41 per cent to 1,517,257 and Vodafone Idea's customers declined by 0.58 per cent to 33,633.

Brokerages' views

Brokerage firm Emkay has recommended buying shares of Bharti Airtel for a target price of Rs 1,000 per share. According to the brokerage, Airtel is benefiting from the mix change, even without any tariff hike.

Axis Securities has given a 'buy' call on Bharti Airtel for a target price of Rs 960 apiece on the back of the company’s strong recovery potential backed by strong deal wins and improved client engagement.

JM Financial has given a 'sell' call on Vodafone Idea for a target price of Rs 6 per share.

"While near-term sustainability has been ensured due to the government’s reform measures, improved capex as well as continued tariff hikes are required to ensure that VIL remains a strong, viable telco in the long term," the brokerage said.

Telecom stocks' performance

In a month, individually, shares of Bharti Airtel have gained over 6 per cent, Vodafone Idea has surged over 31 per cent and Reliance Industries has declined over 3 per cent against Nifty's rise of over 2 per cent.