Teji Mandi: Three things investors should know on January 7, 2021
Teji Mandi

Telecom Subscriber base returns to near normal:

India's telecom subscriber base is recovering fast after a drop during the lockdown. As per the latest report from TRAI, the mobile subscriber base has risen to 115.2 crores at the end of October 2020.

India's mobile subscriber base had shrunk by around 2 crores between March '20 and June '20. The mobile subscribers base was 116 crore at the end of March 2020. It had dropped down to 114 crores since then.

The drop in pre-paid subscriptions was due to the lockdown migration from urban to rural areas. But with workers returning back, the subscriber base is picking up to the pre-covid levels.

It could be difficult for telecoms to continue making aggressive additions to the number of subscribers. The dual sim integration helped the companies to expand their subscriber base. Now, that tailwind has played out for the telecoms. Moreover, the tariff hikes are going to deter users and likely to lead to a fall in the subscriber count.

Maharashtra government's major boost to real estate :

As a part of its relief measures, the Maharashtra government has reduced the premiums charged on real estate development. The government has cut premiums by 50% for one year until December 31, 2021.

Builders will have to absorb home buyers’ stamp duty burden to avail of this benefit.

As per the Deepak Parekh committee, the premium charges are ~50% higher in Mumbai and covers 33% of a project's cost. It is by far the highest across the country.

Maharashtra government's decision to cut 50% premiums will go a long way in supporting the sector. It will speed up the stuck projects, reduce the project cost, and improve cash flow for the builders. It will also translate into lower housing costs, benefiting the home buyers.

A long term growth indicator :

As per the Naukri JobSpeak Index, the hiring activities are rising again.

The index saw a 14% growth, MoM, for December. The level of activity continues to remain lower on a yearly basis. Yet, the pace of decline is shrinking fast.

The hiring in the Insurance sector grew by +45% MoM in Dec’20. The Auto & Ancillary sector (+33%), BFSI (+18%), Pharma/Biotech (+28%), FMCG (+21%), and IT-Software (+11%) too have shown positive MoM growth in hiring activities in Dec’20.

This is a clear signal of recovery and yet another powerful indicator of recovery in the economy. Even on a yearly basis, the pace of decline is moderating fast. Hiring is never done from a short term perspective. Hence, when the firms are hiring, it means that they are seeing long term growth prospects.

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