Telecom shares trade weak; Bharti Airtel down 3% on Jio announcement

Bharti Airtel and Idea Cellular had rallied more than 15% each in past one month.

Shares of telecom companies trading mixed on the bourses after Reliance Industries chairman Mukesh Ambani announced Jio reached 100 million subscribers and launched the Rs 303 per month plan from April 1.

According to the tariff plan, Jio will match the highest selling tariff of other operators and provide 20% more data than what other operators provide. CLICK HERE TO READ FULL REPORT.

Bharti Airtel was trading down 2.6% at Rs 366 and Idea Cellular was down less than 1% at Rs 108, while Reliance Communications trading 3% higher at Rs 36 on the BSE. Reliance Industries (RIL) too up nearly 1% at Rs 1,083.

"The telecom stocks would have reacted more, had Jio extended the free data scheme but the company’s announcement to apply tariff from April 1 will prove positive for the telecom stocks," said AK Prabhakar, Head of Research at IDBI Capital.

He also added that post Jio's entry, all major players are trying to consolidate which will also be good for the street. The merger talks between Idea and Vodafone, RCom and Tata Tele will reduce the number of players and hence, bring back the pricing power.
 
Since telecom stocks have been very cheap comparatively on growth and competitor concerns, the expert said that Bharti Airtel and RCom will be the best picks.

The stock of Bharti Airtel (up 17%) and Idea Cellular (52%) had outperformed the market by gaining more than 15% each in past one month as compared to 6% rise in the S&P BSE Sensex till Monday. RIL was up 4.7% during the same period.

Company	20/01/2017	20/02/2017	% chg	LTP	% chg
Idea Cellular	71.50	108.70	52.0	108.15	-0.5
Bharti Airtel	320.55	375.65	17.2	366.05	-2.6
Tata Comm	674.15	749.65	11.2	751.55	0.3
Rcom	31.20	34.60	10.9	35.55	2.7
Reliance Ind	1025.70	1073.70	4.7	1081.10	0.7
S&P BSE Sensex	27034.5	28661.58	6.0	28686.1	0.1
LTP : Last traded price on BSE in Rs at 02:36 pm