Telecom Stocks Rises: Vodafone Idea, MTNL Jump Up to 19% Amid Market Rally

Indian telecom stocks rallied sharply on Wednesday, riding high on improved global sentiment following reports of a ceasefire between Israel and Iran. The easing of geopolitical tensions lifted investor confidence across sectors, with telecom emerging as a top gainer. MTNL shares soared over 18% trading at ₹57.33, while Vodafone Idea gained 5.25% and trading at ₹7.22, while Bharti Airtel gained 1.44% and is trading at ₹1,961.70 on NSE.

The benchmark indices also traded firm, supported by strong global cues and increased investor risk appetite, fuelling momentum in high-beta sectors like telecom.

Vodafone Idea Rises on Relief Speculation

Vodafone Idea shares rose as much as 5% during intraday trading on speculation that the government may offer relief on the company’s adjusted gross revenue (AGR) dues, which currently stand at approximately ₹84,000 crore. While the telecom operator later issued a clarification denying any official communication regarding relief, the stock still closed higher by over 3%.

Market participants responded positively to the news flow, with trading volumes remaining robust despite the denial. The optimism reflects broader expectations of potential policy support for financially stressed players in the sector.

MTNL Leads Gainers; Investors Eye Long-Term Value

MTNL was the day’s top telecom performer, surging nearly 19% on the NSE. While the company has limited operational traction, investors appear to be speculating on potential consolidation or asset monetisation, supported by improved market sentiment. The stock’s sharp rise underscores how broader market cues and sector-wide tailwinds can drive momentum in PSU telecom counters despite fundamental concerns.

Sector Fundamentals Show Signs of Recovery

Beyond speculative triggers, the telecom sector has shown improving fundamentals. Industry-wide Q4 FY25 results revealed a combined net profit of ₹6,100 crore, reversing previous quarterly losses. Rising average revenue per user (ARPU), increased 4G penetration, and stable subscriber additions have strengthened investor confidence.

Analysts expect a 12% compound annual growth rate (CAGR) in ARPU over the next three to five years, driven by data consumption trends and pricing discipline among operators.

Outlook: Sentiment-Driven Gains May Need Confirmation

While Wednesday’s increase was largely driven by sentiment and speculative reports, the longer-term trajectory of telecom stocks will depend on policy clarity, sustainable earnings growth, and sector consolidation.

Vodafone Idea: Key trigger will be formal relief confirmation or equity infusion.
MTNL and BSNL: Remain speculative bets amid PSU restructuring talks.
Bharti Airtel: Positioned stronger with stable revenue growth and digital expansion.

Conclusion

The telecom sector's strong performance on Wednesday was a blend of global cues, sector-specific optimism, and speculative activity. Investors cheered the geopolitical de-escalation and potential relief for Vodafone Idea, but sustained gains will hinge on tangible policy developments and operational improvements. As market volatility persists, a cautious but optimistic outlook may be warranted for telecom equities.

Disclaimer: This news is solely for educational purposes. The securities/investments quoted here are not recommendatory.

To read the RA disclaimer, please click here