MTNL shares increased by 9%. Should you watch or stay away? These are the opinions of analysts.
MTNL share price: As of now in 2024, the scrip has increased by 62.96%. Despite the aforementioned increase, it has dropped 46.85% from its 52-week peak of Rs 101.88, which was reached on July 29, 2024.
During Monday’s trading session, Mahanagar Telephone Nigam Ltd. (MTNL) shares experienced a significant increase. The stock reached a day high of Rs 55.36 after rising 8.70%. At Rs 54.15, it was last seen trading 6.32 percent higher. At this pricing, the stock has already increased by 62.96% in 2024. Despite the aforementioned increase, it has dropped 46.85% from its 52-week peak of Rs 101.88, which was reached on July 29, 2024.
A news of a rehabilitation plan for the financially troubled telecom PSU coincided with a sharp increase in the share price. “While MTNL is in talks about restructuring and potential government assistance continues, the company needs to focus on improving its core functions to remain competitive in the ever-changing telecommunications industry,” said Atul Parakh, CEO of Bigul.
There is currently no core business for MTNL. The necessity for capital injection and restructuring are increasingly important. Those that bought this stock at a discount may be able to make a profit. Instead of being a core theme, it is a speculative wager, according to WealthMills Securities’ Director of Equity Strategy Kranthi Bathini.
Technically, the Rs 51–50 range was where the counter showed support.
“The stock appeared robust on daily charts and might soon reach an upward objective of Rs 60. Religare Broking’s Senior Vice-President (Retail Research), Ravi Singh, advised keeping the stop loss at Rs 51.
“Rs 50 will be the support and Rs 59 will be the resistance. A clear closing over the Rs 59 mark might lead to more gains above Rs 64. Jigar S. Patel, Senior Manager-Technical Research Analyst at Anand Rathi, stated that the short-term trading range is anticipated to be between Rs 48 and Rs 65.
“The price of MTNL’s stock is rising on daily charts, with a solid level of support at Rs 50.2. AR Ramachandran, a research analyst registered with Sebi, stated that a daily close above the resistance level of Rs 54 might result in a short-term upward goal of Rs 63.2.
The stock of the firm has a price-to-book (P/B) ratio of (-)0.14 and a negative price-to-equity (P/E) ratio of 0.99. Return on equity (RoE) was 13.66 and earnings per share (EPS) was (-)51.30.
Approximately 7.73 lakh shares were observed being exchanged. The number was somewhat less than the 7.78 lakh shares that was the two-week average volume. With a market capitalization (m-cap) of Rs 3,365.46 crore, the counter’s turnover was Rs 4.12 crore.
In August, the MTNL board agreed to a ten-year service contract with BSNL. The board of directors “accorded its approval to enter into a service agreement between BSNL and MTNL for 10 years or unless it is revoked earlier by giving a notice of six months or extended by mutual consent between the parties, subject to approval of the said service agreement by Department of Telecom / Ministry of Company Affairs,” it said.
In accordance with the Department of Investment and Public Asset Management (DIPAM) standards and other regulatory procedures, it has also authorized a proposal pertaining to the sale of MTNL shares in Mahanagar Telephone (Mauritius) Ltd, also known as MTML, an overseas wholly-owned subsidiary.
For the June quarter (Q1 FY25), the state-owned company’s operating revenue was Rs 183.9 crore, a 7.8% year-over-year (YoY) decrease, while its net loss decreased to Rs 773.5 crore. During the same time last year, revenue was Rs 199.5 crore and losses were Rs 851.9 crore.
The telco’s authorized capital was Rs 800 crore, according to the MTNL website. “The 63 crore shares of Rs 10 apiece make up the paid-up share capital of Rs 630 crore. The government now owns 56.25 percent of equity shares, with FIIs, financial institutions, banks, mutual funds, and other investors, including individual investors, holding the remaining 43.75 percent. It stated that MTNL was listed on the New York Stock Exchange in 2001 after receiving Navratna status in 1997.
Disclaimer: The above article is for educational and news purposes, this is not a buying or selling recommendation. TraderPulse recommends that users to check with certified experts before making any investment decisions.
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