Tata Teleservices shares zoom 28% in two sessions; time to buy, sell or hold?

Shares of Tata Teleservices (Maharashtra) Ltd zoomed more than 18 per cent in Thursday's trade, extending their sharp gains for the second straight session. The stock jumped 18.43 per cent to hit a day high of Rs 80.89 over its previous close of Rs 68.30. At today's high price, the scrip has surged 28.11 per cent in just two days. Around 33.35 lakh shares changed hands today on BSE, which was more than five times compared to the two-week average volume of 5.79 lakh shares. Turnover on the counter stood at Rs 25.46 crore, commanding a market capitalisation (m-cap) of Rs 15,281.67 crore.

The company is scheduled to hold its Annual General Meeting (AGM) on June 27, 2023, post-market hours. Tata Tele posted a net profit of Rs 277.07 crore in the March 2023 quarter (Q4 FY23) against Rs 279.79 crore on a sequential -- quarter-on-quarter (QoQ) -- basis. Revenue from operations stood at Rs 280.13 crore in Q4 FY23.

On the technical front, analysts largely felt that the stock looked 'weak'. The near-term support could be seen at Rs 71, one of the analysts said. 

Vaishali Parekh, Vice-President - Technical Research at Prabhudas Lilladher, said, "After a short span of consolidation phase, the stock has indicated a strong bullish candle pattern on the daily charts to move past the resistance zone of Rs 70 and going strong. It has got resistance near Rs 84.50 where it can find some consolidation or maybe profit booking to slip lower to Rs 71 zone which is the near-term support zone."

Ravi Singh, Vice-President and Head of Research at Share India, said, "On technical setup, the stock may witness some selling pressure at current levels. The momentum indicators are suggesting a weak trend in the counter. The stock price may touch the levels of 60 in the near term."

AR Ramachandran from Tips2trades said, "Tata Teleservices is bullish but also overbought on the daily charts with the next resistance at Rs 81.50. Investors should book profits at current levels as a fall till Rs 63 looks possible in the coming weeks."

As of March 2023 quarter, promoters held 74.36 per cent of the company. Tata Teleservices owned 48.30 per cent, while Tata Sons (holding company of Tata Group) and Tata Power accounted for 19.58 per cent and 6.48 per cent, respectively, of the total shareholding.

Tata Teleservices provides connectivity and communication solutions to enterprise customers. With services ranging from connectivity, collaboration, cloud, security, IoT and marketing solutions, it offers a portfolio of ICT services for businesses in India under the brand name Tata Tele Business Services (TTBS). TTBS provides integrated telecom solutions to enterprises and offers one-stop-shop business solutions along with managed services.

In a separate development, the Union Cabinet has approved an Rs 89,047 crore revival package for loss-making Bharat Sanchar Nigam Ltd (BSNL) to help the state-owned telecom operator deploy 4G and 5G services in a market dominated by private players.

The move came just days after BSNL partnered with IT giant Tata Consultancy Services (TCS), Tata Group's crown jewel, to help deploy the 4G network. This is in stark contrast in comparison with the telecom sector as its larger rivals are rolling out the next-generation 5G network.

Meanwhile, Indian equity benchmarks slipped into the red today despite the Reserve Bank keeping the key policy (repo) rate unchanged, at 6.50 per cent, in its June bi-monthly policy meeting. The domestic indices, which were revolving close to their yesterday's record closing highs, slipped in afternoon trade amid profit booking.

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