Emkay Global provides a caution call on the telecom stocks, downgrades Bharti Airtel, Vodafone Idea, and Bharti Hexacom, and maintains only a buy rating for the investors in the Indus Towers stocks.

Stockbrokers at Emkay Global Financial Services have advised against investing in the telecom sector because of lack of growth and priceiness. The broker made downgrades on Bharti Airtel and Bharti Hexacom to lower to the levels of yesterday perfectly and maintained Vodafone at sold levels. It is upgrading Indus Towers to Hold since it is the only towers company that looks promising in the telecom sector because of low growth prospects and valuations.

Emkay stressed that telecom ARPU in India, measured in terms of purchasing power parity, is already close to the worldwide averages. After the tariff increased in FY25, the company feels that there could be less sustainable ARPU growth. Airtel recorded an ARPU of 250, Jio 208.8, and Vodafone Idea 165 in Q1FY26.

Brokerage further pointed out that the growth of the telecom industry could decrease to a historic normal after Reliance Jio recovered its losses due to its disruptive entry. Although Vodafone Idea suffers as a highly indebted company with AGR dues, Indus Towers is likely to enjoy a 5G-led high tenancy ratio.

Emkay has price targets of 1900 rupees on Bharti Airtel and 1800 rupees on Bharti Hexacom, a downgrade on Bharti Airtel and an upgrade on Bharti Hexacom. In the telecom sector, the brokerage downgrades Vodafone Idea and maintains a neutral stance on Indus Towers, setting price targets of 6 rupees and 410 rupees for each, respectively.