MTNL Share Price Fell ~4% After a Full-Fledged Previous Positive Trading Session

On Friday, December 13, 2024, MTNL share price experienced a correction, falling by up to 4% to ₹56.19 at 11:45 AM, hitting a low of ₹55.31. This decline followed a significant gain of over 10% in the previous trading session after the company disclosed its inability to meet the semi-annual escrow account deposit due to insufficient funds.

Inability to Pay Interest Deposits

MTNL announced to the stock exchanges that it could not fulfil the semi-annual interest deposit requirement for its 6.85% Bond Series VI, due on December 21, 2024. This requirement, under a tripartite agreement with the Department of Telecommunications (DoT), the Ministry of Communications, and the bond trustee, could not be met.

However, MTNL emphasized that all its bonds are backed by a sovereign guarantee from the Government of India. In the event of a default, the government is obligated to cover the bond payments, as outlined in the tripartite agreement.

MTNL Q2 FY25 Performance 

The company reported a consolidated net loss of Rs 890.28 crore for Q2 FY25, widening from a net loss of Rs 792.82 crore in Q2 FY24. Revenue from operations decreased by 11.93% year-on-year, reaching Rs 174.23 crore for the quarter ending September 30, 2024. Regarding margins, MTNL posted a negative operating margin of 156.75% in Q2 FY25, compared to negative 152.55% in Q2 FY24. The PSU also reported a negative net profit margin of 510.99% for Q2 FY25, up from a negative 400.77% in the same quarter of the previous fiscal year.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.