By Shares of Mahanagar Telephone Nigam Ltd (MTNL) surged 5% in Thursday’s trading session, hitting their upper price band of ₹56.47. This marks another significant move for the state-owned telecom company, which has seen its stock gain an impressive 69.94% year-to-date (YTD).
The latest jump in the stock price followed MTNL’s announcement of a strategic partnership with NBCC (India) Ltd., which has added a fresh wave of optimism to the market.
MTNL disclosed that the agreement with NBCC involves developing a key land parcel owned by the telecom giant. The land, located on Pankha Road in Janakpuri, New Delhi, spans approximately 13.88 acres and is set to be transformed into a residential and commercial space.
The collaboration is seen as a major step forward for MTNL, leveraging the expertise of NBCC to create a state-of-the-art project. In the exchange filing, MTNL emphasized that the project will capitalize on both organizations’ resources and expertise, positioning the development as a prominent asset in the region.
Market reaction to the announcement was immediate, with a substantial uptick in trading volume. Approximately 10.90 crore shares were traded on the BSE, significantly higher than the two-week average volume of 8.97 lakh shares. The surge in volume highlights the growing investor interest in the stock, which now commands a market capitalization of ₹3,557.61 crore. The turnover for the day came in at ₹6.13 crore.
Despite the price jump, MTNL’s technical indicators present a mixed picture. The stock is currently trading above its 5-day, 100-day, 150-day, and 200-day Simple Moving Averages (SMAs), signaling a positive longer-term trend.
It remains below its 10-day, 20-day, 30-day, and 50-day SMAs, suggesting that short-term pressure may still be present. The stock’s 14-day relative strength index (RSI) came in at 41.92, indicating that while it is not in oversold territory (defined as below 30), it still has room to rise before approaching overbought levels (above 70).
From a financial perspective, MTNL continues to face challenges. The company has a negative price-to-earnings (P/E) ratio of 1.05 and a negative price-to-book (P/B) value of (-)0.14, which reflect its ongoing struggles with profitability.
Earnings per share (EPS) stand at a negative ₹51.30, and the return on equity (RoE) is 13.66%, further emphasizing the firm’s financial difficulties. Despite these numbers, the stock has shown resilience, with investors seemingly betting on its long-term potential and the positive developments surrounding the NBCC deal.
MTNL’s recent partnership with NBCC isn’t the only significant move for the company. Last month, the MTNL board approved a 10-year service agreement with Bharat Sanchar Nigam Ltd (BSNL), another major telecom player.
The agreement allows both companies to work together on key projects, with the option to renew the partnership after 10 years or revoke it with a six-month notice. The collaboration is subject to approval from the Department of Telecom and the Ministry of Company Affairs, signaling a strategic shift in MTNL’s business operations.
Additionally, MTNL is making moves on the international front. The company’s board recently approved the sale of its shares in its overseas subsidiary, Mahanagar Telephone (Mauritius) Ltd (MTML). This divestment is part of a broader strategy in line with the Department of Investment and Public Asset Management (DIPAM) guidelines, aimed at optimizing MTNL’s asset base and strengthening its financial position.
Financially, the company’s performance in the June quarter of FY25 was a mixed bag. MTNL reported ₹183.9 crore in revenue from operations, marking a 7.8% year-on-year (YoY) decline from ₹199.5 crore in the same quarter last year. However, the telecom giant’s net loss narrowed to ₹773.5 crore from ₹851.9 crore a year earlier, indicating some improvement on the bottom line.
Despite its challenges, MTNL holds a significant position in the Indian telecom landscape. The company, which was granted Navratna status in 1997, has a long history of serving the nation’s telecom needs. It was listed on the New York Stock Exchange in 2001, further cementing its place as a major player in the industry.
Currently, MTNL has an authorized capital of ₹800 crore and a paid-up share capital of ₹630 crore, divided into 63 crore shares. Of these, 56.25% are held by the government, while the remaining 43.75% are held by foreign institutional investors (FIIs), financial institutions, banks, mutual funds, and individual investors.
As MTNL continues to navigate the complexities of the telecom industry, market participants are closely watching its stock performance. The recent agreement with NBCC could provide a much-needed boost to the company’s financial health, while its ongoing partnerships and asset sales offer additional avenues for future growth.
Investors will likely keep a close eye on how these developments unfold in the coming months, particularly in light of the stock’s substantial YTD gains.
