5 telecom stocks to watch out for on June 16

Is it time for the resurrection of telecom players? Let us find out.

On June 14 Union Cabinet approved the auction of airwaves capable of offering fifth-generation or 5G telecom services, including ultra-high-speed internet, and gave its nod to set up of captive 5G networks by the big tech firms., The spectrum auction is expected to cost Rs 1 lakh crore to the pockets of telecom players. To lower the financial burden for the telecom companies, the government has relaxed payment schedules for the bidders. Payments for spectrum can be made in 20-equal annual instalments also the bidders would be given an option to surrender the spectrum after 10 years with no future liabilities for balance instalments. The auction of 72 GHz spectrum will commence on July 26, 2022.

S&P BSE Telecom hit its 52-week low on April 08, at 1971.51 on the back of growth and margin challenges faced by the sector. YTD the sector has corrected by 14.32% compared to the benchmark index Sensex which has lost 11.25%. As the auction of the 72 GHz spectrum will commence on July 26, 2022, the focus is on telecom stocks.

Let us see which stocks in the sectors investors should keep an eye on.

GTL Infrastructure Ltd was buzzing on the bourses on Thursday morning, up 3.7%. GTL Infra is a pioneer in the Shared Passive Telecom Infrastructure in India and deploys, owns and manages telecom towers and communication structures that are shared by the Wireless Telecom Operators. The shares of this small cap company hit a 52-week low on May 27 at Rs 1.14 per share and are witnessing fresh buying at lower levels.

Indus Towers zoomed 2.53% on June 15 on the back of a rally in the telecom stocks. On May 16, the shares of Indus Tower hit a fresh 52-week low of Rs 181.15 per share. The stock has seen a trend reversal since then and has recovered 12.82 per cent in one month. On June 16, the shares of Indus Towers opened at Rs 208.30 per share, up 0.92%.

Route Mobile Ltd announced on June 15, the opening of RouteLab, a new R&D centre in Bangalore to develop new edge innovations in Artificial Intelligence, Machine Learning, Mobile Identity and Blockchain. Route Mobile is one of the leading CPaaS (Communication Platform as a Service) providers to enterprises, OTT players, and mobile network operators. The shares of Route Mobile are currently trading at a significant discount to their 52-week high of Rs 2388 per share. On May 26, it hit a fresh 52-week low of Rs 1065.5.

In the morning session, the shares of Route Mobile are trading at Rs 1272.90, a gain of 0.15% over its previous close.

Tata Communications Ltd has bounced from its 52-week low logged on June 15. It was the biggest loser in BSE 200 stocks in Wednesday trades, losing 5%. The stock has been at the receiving end of negative sentiments amid muted growth and lower margins. Muted Q4 results have a lack of visibility of near-term revival had led to downgrades by brokerages.

 In the morning session, the shares of Tata Communications have bounced from yesterday’s lows and are trading at Rs 885.90 a gain of 1.18% over its previous close.

Bharti Airtel has entered into an Agreement for the acquisition of 62,58,000 (14.304%) equity shares in Avaada MHAmravati Private Limited, a special purpose vehicle formed to own and operate the Captive Power Plant, in terms of the regulatory requirement for captive power consumption under electricity laws. The acquisition cost is Rs 6.25 crore at Rs 10 per share. At the time of writing shares of Bharti Airtel were quoting at Rs 673.10 per share with a loss of 1.3% over its previous close.