Stock Tips: The central government has recently announced four major gifts for the telecom sector. Due to this, shares of telecom companies are attracting investors for investment. Analysts have increased the target price for the giant telecom company Airtel. On the other hand, the economy derailed due to Corona epidemic is slowly coming back on track. Analysts believe that investors in Phoenix Mills have a golden chance of earning around 40 per cent profit. On the other hand, when it comes to Zee Entertainment, there has been a lot of ups and downs regarding the board members recently and experts believe that it can be strong when the board’s work is normal and investors can earn bumper profits in it.
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Bharti Airtel- Buy
- The central government has made three important reforms regarding the telecom sector, which has given a big relief to this sector. A four-year moratorium has been approved for AGR (Adjusted Growth Revenue) and spectrum payment, which has ensured liquidity to these telcos in the near term. The Central Government has abolished spectrum usage charge and approved the auction calendar to be fixed and spectrum surrendered, making investment in this sector easy and attractive. The central government has taken the third important decision in the form of exclusion of non-telecom revenue from the AGR calculation. Apart from this, KYC requirements have been relaxed, which will provide margin support.
- Vodafone Idea has got a big relief from the central government’s reforms, due to which the possibility of dominance of only two companies in the telecom market has stopped. However, the situation of Vodafone Idea still cannot be said to be much better. Even if Voda Idea excludes spectrum and AGR dues, it needs quarterly EBITDA of Rs 560 crore to pay interest on its financial liability of Rs 22,500 crore. Its EBITDA stood at Rs 1280 crore in the first quarter April-June 2021 of the current financial year, with a decline of 13 per cent, it will fall below the threshold of Rs 560 crore. The company’s revenue may decline due to the investment of its annual cashflow in Airtel’s network. This will increase the market share of Airtel.
- The biggest risk of investing in Airtel is the postponement of the tariff hike. Due to the re-strengthening of Voda-Idea, the tariff hike may be averted. However, even in this situation, Airtel can attract the most customers, whose market share will increase.
- According to analysts at brokerage firm Jeffreed, the market share of Airtel is expected to increase by 340 bps to 39 per cent between FY 2022-24.
- Jefferies has given a buy rating to Airtel. Investors can invest in it at a target price of Rs 850.
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Zee Entertainment– Buy
- Major institutional shareholders of Zee Entertainment Limited (ZEEL) have demanded the re-constituted board. In this, the promoters’ stake is only 3.99 percent. Its new board may be formed soon. After the completion of all the proceedings related to the board, there is a possibility of strength in its shares.
- According to analysts at Edelweiss, investors will have to keep an eye on the EGM (Extraordinary General Meeting). In this, the eyes of investors will be on Goenka whether he will continue to be the CEO of the company or not.
- Talking about the near term, there can be volatility in its price. However, in the long run, due to improving corporate governance standards, there is a possibility of a boom in it.
- According to analysts, FMCG companies will step up marketing in the festive season, which will increase the expenditure on advertisements. Apart from this, due to the normalization of traffic, the expenditure on advertisements will also increase.
- Analysts at Edelweiss have given a buy rating on the stock with a target price of Rs 343.
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Phoenix Mills – Buy
- According to analysts, the biggest risk on investing in its shares is the corona epidemic, which may affect mall consumption and may lead to a fall in rental income.
- In the last financial year 2021 and the first quarter of the current financial year, the business of Phoenix Mills was affected due to the closure of malls due to Corona epidemic. Mall consumption stood at Rs 3330 crore in FY 2021, which was 69 per cent as compared to FY 2020, while rental income of Rs 560 crore stood at 55 per cent as compared to FY 2020.
- Phoenix has raised Rs 2600 crore between August 2020 and June 2021 through stake sale at SPV (Special Purpose Vehicle) level and through QIP (Qualified Institutional Placement) route. Apart from this, there is an additional funding pool of Rs 1000 crores.
- Analysts at brokerage firm ICICI Securities estimate that Phoenix Mills’ LTL (loss-to-lease) rental income may decline by 30 per cent in the current financial year on account of rent rebate in the first half of FY22. LTL rental is the difference between the market price and the actual rent received.
- However, the situation will improve in FY 2023 as there is a strong growth potential for ‘A’ grade malls in the country.
- If the third wave of Corona does not come, then in the second half of FY 2022, October-March 2021, retail rentals may reach the level before Corona. Rental income can grow at a CAGR (Compound Annual Growth Rate) of 14 percent by FY 2020-FY 2025 i.e. rent income can reach Rs 1950 crore in FY 2025 while rental income in FY 2020 is Rs 1000 crore Was.
- Brokerage firm ICICI Securities has retained the buy rating of this stock. Investors can buy its shares at the target price of Rs 1231 per share.