Reliance Jio & Bharti Airtel Initiate India, Telecom Tariff Hikes, What Does It Mean? | BNSN Lens

Hello and welcome here TuneIn to Buy now, Sell Now Aniti Now I'm Shrushti Sharma. With me is Summit Sarkar and viewers, this is the show where you get answers for all your stock related queries. In a short while from now, we will connect with our experts and on to the buy now sell now lens. We're going to be focusing on the hot sector of the day and that is indeed telecom. But before that, let's have a quick look what the markets are up to. So that fearful bull run continues on the benchmark indices and what we are seeing is that Nifty has scaled past comfortably above that 24000 mark. 24142 is what we are trading at. Apart from the bank, Nifty is also trading in the green right now. But today the breadth of the market is quite favourable and is tinted on on the favours of the advances. If we talk about some of the sectors that are buzzing today, then clearly the farmer is leading from the front and apart from that that's interesting to know that oil and gas spaces also taking a good front seat. If we talk about some of the gainers, then ONGC, Reliance as well as from the likes of MGL and IGL are seen to be buzzing. But on the flip side, some bit of a profit booking in the stock of Bharti ET al is what we are witnessing. Some of the IT names like HCL Tech on the back of the blog deal is seen to be declining or still in the red. And some of these private banking names which have seen great which run up in the recent past taking, moving and helping the move in the Bank Nifty stocks like Indescent Bank, Axis Bank as well as Kotak Mahindra Bank are seeing some bit of a profit booking in trade right now. But let's move on and let's shift focus and put the spotlight on the telecom space then. And we have the Somit with us and Somit tracks this sector closely. So Somit just yesterday post market we did see Reliance announcing its terrified and now it's Bharti Airtel. Tell us how are the tariffs had been done versus the expectation and what kind of impact we can have on their financials? Well on versus expectation, the tariff acts are pretty much in line with what the street was expecting. Now did Lanzio took the first move and increased the tariffs by around 12.5 to 25 odd percent and something which is much more than what actually Bharti Airtel did. Now Bharti Airel took a hike of around 10 to 21 odd percent. Now something common between both the tariffs acts of Bharati Airtel and Reliance Geo is that unlike the previous two instances where the tariffs were released only for the prepaid segment, this time tariffs have been raised also for the postpaid segment. Now Reliance Geo has increased the postpaid tariffs by around 12.5% to 17 odd percent. While Bharati Airtel has increased the postpaid tariffs by around 10 to 20 odd percent. Apart from that, one more thing that is something different that has been done by Reliance Geo this, this time, this time terrified is that earlier 5G data was freely available for every customer. But now Reliance Jio has put a cap only those customers who are on plan that have 2GB or more of that data per day will only be getting the 5G services going forward. So in short, earlier a customer used to get 5G data for ₹155 plan, now he will get a 5G data only for the ₹349 plan. So a kind of monetization that NGO has done for 5G data, but Airtel has not taken any such moves on that front. They have still kept the 5G data free for all. Apart from that, the most popular plan for Lanzio that was a 239 and the 299 plan, there the hike has been around 70 to 25 odd percent. While for Bharati Airtel, if you see the most popular plan which was the 299 plan, there the hike is around ah, 17 odd percent. So a kind of similar hikes that we have seen for the popular plan as well. Ah and one more thing different that Reliance Bharti ET al has done is that they have also increased a tariff for voice heavy plans and not data heavy plans. But on that front, Reliance Geo has actually not increased the tariff when it comes to Geo phone plan. So Reliance for Reliance Geo, the Geo phone plans remain the same like like they were earlier. But for Bharati Airtel, we have seen an increase when it comes to the voice only plan and that's where the risk is coming in. And what street is expecting is that that could lead to most 2G subscriber churn for Bharati Airtel. These two G subscribers could move in a move out from Bharati Airtel and could come into Reliance Geo, so could benefit Geo going forward, but that remains to be seen currently. Apart from that, what could be the financial impact of this for Reliance Geo? What the street is expecting is that this could result into an ARPU increase of around 15 to 18%. But obviously this will not happen in just one quarter. It will happen over a period of time. So it might take at least three quarters to realize to completely realize this benefit of tariff hike. And this tariff hike again could lead to an increase in a bit of around 16 odd percent, 19 odd percent for Reliance Geos quarterly EBITDA. For Reliance Industries quarterly EBITDA that could boost by around 6 odd percent over a period of time not in 1/4. For Bharati Airtel, they are expecting a revenue growth of around 15 odd percent analyst is expecting. And that could lead to an Bharati Airtel consolidate EBITDA growth of also around 12 to 13 odd percent. So over also again over a period of time, it's not happening in 1/4. So that's the financial benefit coming in for Bharati Airtel and Reliance. All right, Sami, thank you so much for explaining us what this terrifying means for the company, their impact on their financials and why indeed the stocks are reacting in this way. Some bit of a profit booking indeed, we are seeing on the stock of Bharati Airtel and even Vodafone Idea. But with this, let's move on. And it's time to welcome both of our experts on the show today and try to get their perspective on the telecom space with would like to welcome Himen Kapare on the technical front as well as to guide us fundamentally today. Avinash Gaurakshakar is with us. Very good morning to both of you and thank you so much for your time. The news flow is out there. But Hemain wanted to understand that how are these counters placed technically as well as any of the stock that still looks attractive to you at this point? Because in the recent file, we have seen great moves on Bhar Theatre, Reliance, even Indus Stars and Vodafone Idea as well. So Hemain, what's your view technically and any of your top bets at this point? Abed, good morning, dear Sissy. Thank you for having me on the show. It's always a pleasure. Like you said, they've all moved. Very valid point. Would I have more? Reliance has more, Bharti has more, everything has more. Having said that, Boda has underperformed Vodafone for last five years. Now things are beginning to look up. So technically, despite the woeful underperformance over the last five years, it still looks relatively better than the others. But there's a virtual roadblock at 20. But yeah, it's formed a major consolidation phase between 6:00 on the downside and 18 on the upside, and yet just on the cusp of coming out from that range. So Vodafone Idea would be an interesting high risk bet. The easiest one would be Reliance HST, because Reliance has taken 21 weeks from 2720 to 3018. It's taken 21 weeks to consolidate and finally give a breakout. And I think before the tariff highs came in were Reliance had given a break breakout the day before. So a bit late in the day, but yeah, Reliance still would have a few ₹100 left. On the upside, Bharti has gone up one way. So I'm not sure if it makes sense to change Bharti. So I would say not any short term call, but it would be Voda, Reliance and Bharti from that Picking on Avinash, fundamentally which telecom stock is looking the best bet for you As for you at this moment, I think we continue to be positive on Bharti Airtel. I think considering the fact that, you know, it's one of those companies where not only the Arpus have remained, you know, steady, most importantly, subscriber additions in the last three to six months have been constantly increasing. If you look at Vodafone, I think the biggest challenge for them is that they carry a huge amount of debt on the balance sheet and they've been losing customers quite significantly. So I think, you know, Bharti Airtel definitely qualifies as a good bet. Of course, you know, Reliance Jio, which is part of Reliance Industries can obviously be looked upon on declines. But Bharti Airtel, I believe you know, once the ARPU benefit trickles down to the profitability numbers, we could see strong traction and profitability for FY25. And plus their, their, their 5G rollout is also going to be pretty aggressive in the coming year. So I think Bharti Airtel even at the current odd levels in the morning, we saw a spike up in the stock thereafter some profit booking. But I think clearly Bharti seems to be well positioned and I think you could possibly see levels of 1550 if you have a 12 to 15 one kind of timeframe. That's the day coming in on on the telecom stocks. But with this view, it's time to slip into a very short break in this edition of buy Now, sell now, don't go anywhere. As we come right back, it's time to take all your stock related queries. If you like this video then like, share and subscribe to ET Now.