A day after telecom giants Bharti Airtel and Vodafone Idea reported a combined net loss of Rs 74,000 crore for the second quarter of the financial year, most telecom stocks are trading in positive territory.
The stocks saw increased traction after sources said that the committee of secretaries (CoS) was thinking of implementing floor price on data and voice tariffs.
According to a CNBC-TV18 report, the CoS has also sought recommendations from the Department of Telecom (DoT) with regards the creation of a minimum charge for all tariffs for telecom players while assessing the impact it would have on telecom operators.
According to sources, DoT would is expected to begin consultation on the floor price for voice and data with telecom companies soon.
This move would be especially beneficial to companies such as Vodafone Idea and Bharti Airtel.
Following the news, Vodafone Idea shares rose 10% intraday. Bharti Airtel jumped by 9% while Bharti Infratel jumped 8% in the intraday trade so far on BSE. With most telecom stocks trading in the positive territory, the BSE Telecom index has jumped 8% in intraday trade so far.
In case of Bharti Airtel, UBS has maintained a buy call, with a target of Rs. 415 per share, being firm in its opinion that the company has defended a solid market share backed by a strong spectrum bank.
Credit Suisse on the other hand has maintained a neutral call while raising the raising the target from Rs. 370 to Rs. 380 per share. It believes that at least in the near term regulatory headwinds are likely to remain an overhang.