Business Desk – Vodafone Idea Share: Shares of Vodafone Idea (Vi) have given excellent returns to investors in recent months. The company’s shares have risen by almost 80% in less than three months, while in the last one year it has registered a rise of almost 110%. After hitting a low of Rs 8.13 in April, the stock made a strong comeback and made a new 52-week high of Rs 15.34 earlier this month.
Why did the stock rise?
There were many big reasons behind Vodafone Idea’s rally. First of all, the Department of Telecommunications (DoT) reduced the AGR dues of the company by 27% to Rs 64,046 crore. This reduced the financial pressure on the company and increased investor confidence.
Apart from this, the return of industrialist Kumar Mangalam Birla as non-executive chairman after almost five years also gave a positive signal to the market. Recently, the company announced raising Rs 1,182 crore by issuing warrants from Aditya Birla Group, which gave further support to the stock.
What are the experts saying?
According to Hitesh Rathi, Technical Analyst of Angel One, despite the recent rise, no major bullish trend is visible in the stock chart yet. He says that the stock is still trading in a limited range and its trend remains neutral to bearish. However, the stock is resting on a strong support zone. In such a situation, it can reach Rs 18 to 20 in the near term.
Why is the Rs 20 level important?
According to experts, if Vodafone Idea stock remains firmly above Rs 20, it will make a new “higher high” for the first time in many years. In such a situation, there may be a possibility of the share going up to Rs 29 to Rs 30.
Fundamentals still a matter of concern
Harshal Dasani, Business Head, INVasset PMS, believes that the recent rise should not be considered a sign of strong fundamentals of the company. According to him, this rise is mainly the result of positive sentiment, government relief and short covering.
The company is still losing customers compared to Jio and Airtel. ARPU (Average Revenue Per User) is also less than competitors. Apart from this, the debt burden on the company is still heavy and it is also lagging behind in 5G network expansion.
Buy, Sell or Hold?
Experts believe that Vodafone Idea may currently be a better opportunity for short-term traders than long-term investors. If an investor wants to invest in the telecom sector, companies with strong fundamentals can be a safer option. Vi’s shares are currently considered to be in the high risk-high reward category. Therefore, it is important to keep in mind the risk appetite and investment period before investing.
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