Posted on March 13, 2025, by Niftynews
MTNL shares have experienced a significant surge of 18.37% on Thursday, hitting a high of ₹51.30. This sudden uptick in MTNL share price is driven by several key factors, including the company’s asset monetisation strategy and growing investor confidence. At the close of trading, MTNL was seen trading at ₹50.34, showing an impressive 16.15% increase. However, despite today’s growth, MTNL stock has faced a 2.04% decline year-to-date (YTD).
The sharp rise in MTNL stock price comes amid a period of increased trading activity, suggesting strong market interest. But what exactly is behind this surge in MTNL shares? In this article, we explore the reasons behind the spike and the key financial and technical details that investors need to know.
High Trading Volume on BSE
MTNL shares were among the top gainers on the Bombay Stock Exchange (BSE), with approximately 27.23 lakh shares changing hands, a significant jump from the two-week average volume of just 4.47 lakh shares. This high trading volume highlights a surge in investor interest, as more traders take notice of the company’s recent developments.
MTNL’s Asset Monetisation and Financial Gains
The primary catalyst behind the 18% surge in MTNL shares is the announcement that the company had received over ₹2,134 crore from the monetisation of assets. This included the sale of land and buildings, contributing positively to MTNL’s balance sheet. As of January 2025, MTNL’s total earnings from monetising land, towers, and fibre assets amounted to a significant sum.
This move is part of a broader strategy undertaken by state-run telecom companies such as MTNL and BSNL. According to data shared by the Minister of State for Communications, the total amount earned by BSNL and MTNL from the sale of these assets is ₹2,387.82 crore and ₹2,134.61 crore, respectively. The government sees asset monetisation as a way to reduce financial strain and improve the operational efficiency of these PSUs.
In addition to land and property sales, MTNL also gained ₹258.25 crore from the monetisation of its close assets, which include telecom towers and fibre optics. These moves are expected to help MTNL stay afloat financially while the government continues to monitor the impact of such policies closely.
Technical Indicators: MTNL Stock Performance
From a technical analysis standpoint, MTNL stock has been performing well in the short term. The stock was trading above its 5-day, 10-day, 20-day, and 30-day simple moving averages (SMAs), but still lagging behind the 50-day, 100-day, 150-day, and 200-day SMAs. This indicates that while the stock is seeing some momentum, it has yet to recover to longer-term averages.
MTNL’s 14-day Relative Strength Index (RSI) stood at 59.14, suggesting that the stock is neither overbought nor oversold. A reading of above 70 indicates an overbought condition, while a reading below 30 signals that the stock is oversold. With the RSI at 59.14, the stock appears to be in a relatively balanced state.
Financial Snapshot: MTNL Key Metrics
Despite the positive movement in MTNL stock price, its financials show a mixed picture. The company’s price-to-earnings (P/E) ratio is negative at 0.95, and its price-to-book (P/B) ratio stands at (-)0.12, signaling that the company is still struggling in some financial areas. Additionally, MTNL’ earnings per share (EPS) is reported at (-)52.60, and its return on equity (RoE) is 13.10%.
Market Capitalisation and Shareholding
MTNL market capitalisation (m-cap) stood at ₹3,172.05 crore as of the latest trading session. The stock also witnessed significant activity with 29.52 lakh buy orders compared to 7.86 lakh sell orders, indicating strong investor confidence.
The government holds 56.25% of MTNL’s equity shares, while the remaining 43.75% is owned by financial institutions, mutual funds, individual investors, and others. This indicates that MTNL stock remains under significant government control, but there is still a healthy level of institutional and retail investor participation.
Conclusion: Is MTNL a Good Investment?
The recent 18% surge in MTNL shares reflects a positive response from investors, especially given the company’s progress with asset monetisation. However, the stock still faces challenges, and potential investors should consider both the positive technical indicators and the company’s financial performance before making investment decisions.
MTNL’s recent performance is promising, but careful monitoring of both short-term trends and long-term recovery strategies will be essential to determine its future growth potential. Keep an eye on MTNL earnings reports and any further developments regarding asset monetisation and government policy changes.
