MTNL shares are in focus as they jumped by 5.42 percent after reports of the DOT asking all state governments to give preference to BSNL and MTNL for telecom services.
With a market capitalisation of Rs. 3,203 Crore, the stock of Mahanagar Telephone Nigam opened at Rs. 49.70, around the same level as yesterday’s close, and after opening, it made a high of Rs. 52.24, up 5.42 percent. Additionally, the Yearly return for the stock is 34 percent, and the past 5-year return is an impressive 476 percent.
Recent Developments
The Department of Telecommunications (DoT) has asked all state governments to give preference to BSNL and MTNL for telecom services, mainly because of data security concerns.
This rule was earlier meant only for central government offices, but is now being extended to state departments and public sector units. If this is followed, private telecom companies could lose a big chunk of their income from government contracts.
Industry experts say this could lead to losses of thousands of crores, especially for smaller internet companies. However, the DoT defends its move by highlighting BSNL’s recent comeback, it earned a profit of Rs. 262 crore in Q3 FY25, its first profit since 2007-08 and is now investing heavily in 4G and fibre networks.
MTNL was set up on 1st April, 1986 by the Government of India to upgrade the quality of telecom services, expand the telecom network, introduce new services and to raise revenue for telecom development needs of India’s key metro cities of Delhi & Mumbai.
MTNL is the principal provider of fixed-line telecommunication services in the two Metropolitan Cities of Delhi and Mumbai. It offers mobile services in the city of Delhi, including four peripheral towns Noida, Gurgaon, Faridabad & Gaziabad and the Mumbai city along with the areas falling under the Mumbai Municipal Corporation, New Mumbai Corporation and Thane Municipal Corporation.
The company reported an 18.66 percent YoY decrease in revenue from Rs. 209 Crore in Q4FY24 to Rs. 170 Crore in Q4FY25. On a QoQ basis, the company reported similar revenue compared to the previous quarter.
Their Net loss saw an increase YoY from Rs. 784 Crore to Rs. 828 Crore for the same period. On a QoQ basis, the company reported a decrease in Net loss from Rs. 836 Crore in the previous quarter.
Total Debt for FY25 stood at 32,441 Crore, which was an increase from the FY24 debt of 30,141 Crore. Out of the Rs. 32,441 Crore borrowing, 72 percent is long-term borrowings, and 27 percent is short-term borrowings.
Written By Abhishek Das
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