Telecom companies, including major players like Bharti Airtel and Vodafone Idea, are expected to implement an additional 15% tariff hike in FY27. Analysts highlight that India's telecom services remain highly affordable compared to other Asian countries, creating room for further increases.
This could make share market investment in these companies more attractive, particularly given the favourable regulatory environment in India. The affordability of services, combined with tariff hikes, positions these companies to maintain growth and profitability, benefitting those making share market investments.
Bharti Airtel and Vodafone Idea, two of India's leading telecom providers, are expected to raise tariffs by 15% due to ongoing economic and market conditions. An international brokerage firm noted that despite the Supreme Court's recent ruling in the Adjusted Gross Revenue (AGR) case, telecom services in India remain the most affordable in the region, with data prices per GB significantly lower than in neighbouring countries. With this affordability, share market investment in these telecom firms is anticipated to become more lucrative as tariff hikes contribute to their revenue growth.
Vodafone Idea has struggled in recent years due to its significant liabilities. Analysts at JPMorgan noted that Vodafone Idea must increase tariffs annually to cover its spectrum and AGR dues, making these hikes essential for the company's financial health. With a 15% hike projected in FY27, share market investment in Vodafone Idea could see improved performance. While the company's stock has seen volatility, JPMorgan has upgraded its rating and increased its price target for the stock, indicating potential recovery.
Bharti Airtel, one of the sector's top picks, is also projected to implement a 15% tariff hike in FY27, further boosting its revenue and margins. The company is anticipated to report strong earnings growth, driven by increased Average Revenue Per User (ARPU) and subscriber gains.
For investors considering share market investments, Bharti Airtel remains a solid choice, especially with JPMorgan maintaining an 'Overweight' rating and increasing its price target for the company's shares. Similarly, Bharti Hexacom is expected to benefit from tariff hikes, with projected increases in revenue and EBITDA.
Indus Towers, a leader in the telecom tower sector, is expected to continue its strong performance, bolstered by ongoing tower additions and steady payments from Vodafone Idea. The company is well-positioned for growth, with analysts expecting its stock price to rise further as the telecom sector expands. For those looking at share market investments in the telecom sector, Indus Towers offers a promising opportunity due to its stability and growth potential.
JPMorgan anticipates that the upcoming tariff hikes will significantly benefit the telecom sector, with revenue and EBITDA expected to rise across the board. Bharti Airtel, Vodafone Idea, Bharti Hexacom, and Indus Towers are all set to capitalise on these increases, making them strong contenders for share market investment. The brokerage firm's forecast for Q2 earnings shows solid growth for all major players, with Bharti Airtel expected to report a 6.7% increase in wireless revenue, driven by a rise in ARPU.
As India's telecom sector braces for further tariff hikes, the outlook for share market investments in this industry remains positive. The affordability of services, combined with regulatory support, creates an environment ripe for sustained revenue growth. With Bharti Airtel and Vodafone Idea set to implement another 15% hike in FY27, investors can expect higher returns in the coming years. For those exploring share market investment, the telecom sector presents significant opportunities for growth and profitability.
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