Telkom Shows Profit Strength as Market Tests Next Breakout Zone for the JSE: TKG Share Price
Although investor momentum is still being challenged by overhead resistance, Telkom's most recent results and technical setup indicate...
Quick overview
- Telkom's share price has rebounded by approximately 12% in November after a period of decline, driven by positive investor sentiment and improved earnings.
- The company's first-half FY2026 results show significant profitability gains despite modest revenue growth, with notable increases in EBITDA and profit.
- Technical analysis indicates that Telkom's stock faces overhead resistance at the 20-week SMA, which must be surpassed for further upward momentum.
- Looking ahead, Telkom aims to sustain its growth trajectory while navigating economic challenges and increasing competition in the ICT sector.
Although investor momentum is still being challenged by overhead resistance, Telkom’s most recent results and technical setup indicate renewed optimism.
Telkom Share Price Regains Momentum After Months of Weakness
After three consecutive months of retreat, Telkom’s share price has staged a meaningful recovery in November, rising roughly 12% as investors responded positively to improving sentiment. The latest earnings release reinforced this shift, giving the stock an additional push higher on Tuesday. Still, buyers now face a notable resistance band overhead—an area that must be cleared for a run toward the July peak above R60.
TKGJ Chart Weekly – Buyers Need to Break Above the 20 SMA
Stronger Profitability Despite Soft Revenue Growth
Telkom SA’s first-half FY2026 performance signaled a meaningful turnaround in profitability, even though revenue growth remained modest. The bulk of the improvement stemmed from continuing operations, where the company delivered sizeable advances in EBITDA, EPS, and HEPS—each posting notable double-digit increases.
However, the absence of contributions from discontinued operations and the group’s decision not to declare a dividend reveal that management remains financially cautious. The earnings mix shows clear operational progress, yet the company is still leaning heavily on efficiency gains, cost control, and its established connectivity infrastructure rather than rapid revenue expansion.
Overall, the results reflect a business that is stabilizing and improving, but still contending with an uneven growth environment.
Technical View: Support Holds, but Key Moving Average Blocks Breakout
From a market perspective, the JSE-listed TKG share price pulled back from its July peak but found reliable support at the 50-week SMA near R45, where buyers re-entered confidently. Over the last two weeks, the stock surged back above R50, signaling revived appetite.
The next test lies at the 20-week SMA, which is acting as immediate resistance. A decisive move above that level would open the path toward the October high above R60, and beyond that, the long-term bullish objective sits at the 2019 record near R100.
Telkom SA Group Interim Results (Six Months Ended 30 Sept 2025)
Key financial indicators show moderate revenue growth but strong recovery in profitability across continuing operations.
1. Continuing Operations – Financial Performance
Revenue
- R22,104 million in H1 FY2026
- Up 3.4% from R21,382 million in H1 FY2025
EBITDA
- Reported EBITDA: R6,023 million
- Up 24.8% from R4,828 million
- Adjusted EBITDA: R5,606 million
- Up 7.4% from adjusted H1 FY2025
Profit for the Period
- Reported profit: R1,604 million
- Up 88% from R853 million
- Adjusted profit: R1,421 million
- Up 12.9% from adjusted H1 FY2025
Dividend
No dividend declared (cents per share: 0)
2. Total Operations – Earnings Overview
(Includes continuing and discontinued operations)
Basic Earnings per Share (EPS)
- Reported EPS: 325.7 cents
- Up 49.7% from 217.6 cents
- Adjusted EPS: 333.3 cents
- Down 2.3% compared to adjusted H1 FY2025
Breakdown:
Continuing operations:
- EPS: 325.7 cents (+88%)
- Adjusted EPS: 288.9 cents (+12.7%)
Discontinued operations:
- EPS: 0 cents (previously 44.4 cents, -100%)
3. Headline Earnings per Share (HEPS)
- Reported HEPS: 305.6 cents
- Up 59.6% from 191.5 cents
- Adjusted HEPS: 307.2 cents
- Slight decline of 0.5% compared to H1 FY2025
Breakdown:
Continuing operations:
- HEPS: 305.6 cents (+108%)
- Adjusted HEPS: 262.6 cents (+16.4%)
Discontinued operations:
- HEPS: 0 cents (previously 44.6 cents, -100%)
CEO Commentary: Strategy, Fibre Assets, and Employee Execution Drive Progress
Group CEO Serame Taukobong emphasized that the business is building on momentum carried over from the previous financial year. He highlighted the strength of Telkom’s data-centric strategy, the resilience of operations in a difficult environment, and the company’s role as a key enabler of South Africa’s digital infrastructure.
Taukobong also credited employees for consistent strategy execution and reaffirmed that Telkom’s extensive fibre network continues to underpin growth—particularly supporting the mobile division, which has achieved market-leading service-revenue growth for 11 consecutive quarters.
Outlook: Growth Potential Meets Economic and Competitive Headwinds
Looking ahead, Telkom aims to maintain the trajectory set in the first half while keeping performance aligned with its medium-term targets. Yet the path forward is not without challenges. The company expects subdued national economic growth in 2025, intensifying competition across mobile and fibre, and muted ICT spending among corporate clients.
These conditions increase the importance of maximizing the value of Telkom’s fibre footprint, strengthening its mobile service and data offerings, and sharpening competitiveness under the OneTelkom operating approach.
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