Why is MTNL stock falling after so much growth? Which shares should be bought?

Hello friends, welcome to a new post. Today, we are discussing the Mahanagar Telephone Nigam Ltd (MTNL) share, which has been a hot topic lately. Let’s delve into the potential growth of MTNL.

Why is MTNL stock falling after so much growth?

Recently, MTNL’s stock has experienced a decline after a period of growth. This drop can be attributed to the company’s ongoing financial struggles, including significant losses and high debt of approximately ₹30,141 crore. Poor fundamentals, such as a -8.18% Return on Capital Employed (ROCE) and negative Return on Equity (ROE), have diminished investor confidence.

What does MTNL do?

MTNL is a state-owned telecommunications provider, primarily serving Delhi and Mumbai with landline, broadband, and mobile services. Established in 1986, the company faces tough competition from private players like Reliance Jio and Airtel, making it challenging to retain its customer base.

Latest News about MTNL

In 2024, the government is considering a merger between MTNL and BSNL to stabilize both companies. However, significant improvements in MTNL’s financial health are necessary for this to be effective.

How much debt does MTNL have?

MTNL’s debt of around ₹30,141 crore poses severe challenges for its operations and profitability, necessitating urgent measures to manage this liability.

Fundamental Analysis of MTNL

Market Cap: ₹3,065 crore

Current Value: ₹48.6

Book Value: ₹-375

Dividend Yield: 0%

Promoter Holding: 56.2%

Interest Coverage Ratio: -0.16

Profit Variation: -12.5%

Should MTNL shares be bought?

Investors should approach MTNL shares with caution due to its precarious financial situation. Although long-term investors willing to take risks might consider it, those seeking safer investments should steer clear.

Disclaimer

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