Fund Manager Summary
The fund managers believe that Telstra Group Ltd presents a promising outlook for investors, particularly following its recent performance. They note that Telstra's underlying EBITDA rose by 6% year-over-year to A$4,248 million, exceeding expectations, while revenue growth remained modest at 1%. The unexpected announcement of a A$750 million share buyback is seen as a significant positive development. Looking forward, the midpoint FY25 EBITDA guidance suggests a growth range of 3-6%, which is favorable compared to last year's 4%. Additionally, despite trading ex-dividend, TLS shares gained 5% in February, and shareholders will receive a 9.5 cents per share dividend, yielding 4.6% annually. The fund managers are optimistic about further margin expansion through cost-cutting initiatives, particularly leveraging AI for operational efficiency.
Source: Trading View
Commentary From The Managers
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Sterling Managed Investments
31 Aug 2025
$4.98
Summary
- Sterling Managed Investments has decided to moderate their holding in Telstra (TLS.ASX) following a period of outperformance.
- The decision comes after a slightly softer-than-expected FY25 financial result and outlook.
- Telstra remains a core holding in Sterling Managed Investments' equity portfolios.
- The investment is supported by a reliable and growing fully-franked dividend stream.
- Telstra's market-leading mobile network business is a key strength.
- Ongoing strong cost discipline contributes positively to the investment thesis.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Sterling Managed Investments
31 Aug 2025
$4.98
- Sterling Managed Investments has decided to moderate their holding in Telstra (TLS.ASX) following a period of outperformance.
- The decision comes after a slightly softer-than-expected FY25 financial result and outlook.
- Telstra remains a core holding in Sterling Managed Investments' equity portfolios.
- The investment is supported by a reliable and growing fully-franked dividend stream.
- Telstra's market-leading mobile network business is a key strength.
- Ongoing strong cost discipline contributes positively to the investment thesis.
Summary
Clime Investment Management
31 Aug 2025
$4.98
- Clime Investment Management has moderated its holding in Telstra (TLS.ASX) following a period of out-performance.
- Recent FY25 financial results were slightly softer than expected.
- Despite this, Telstra remains a core holding in Clime's equity portfolios.
- The company offers a reliable and growing fully-franked dividend stream.
- Telstra's market-leading mobile network business continues to support its growth.
- Strong cost discipline is evident within the company.
Summary
BKI Investment Company
30 June 2025
$4.84
- BKI Investment Company has increased its holding in Telstra Group Ltd (TLS-ASX).
- The company is recognized for its compelling revenue growth.
- There is a strong outlook for earnings growth.
- Telstra offers attractive dividend growth.
- BKI Investment Company continues to see potential in the telecommunications sector.
Summary
Pengana Capital Group
30 June 2025
$4.84
- Pengana Capital Group continues to hold a positive outlook on Telstra Group Ltd.
- Management is allocating capital wisely, especially towards infrastructure assets.
- Optimism remains around annuity streams from NBN assets, Mobile Phone Tower network, and recent fibre optic expansions.
- Telstra's ability to monetize its superior mobile network supports sustainable cash flows.
- Stakeholders are increasingly recognizing the importance of resilient data networks.
- Encouragement for telco industry investment in infrastructure may lead to better returns on capital.
- Competitors are currently earning subeconomic returns on their invested capital.
- Valuations are influenced by lower maintenance capex compared to accounting depreciation, implying higher cash flows for shareholders.
- Other business segments contribute modest profits but absorb significant infrastructure overheads.
- Ongoing assessment of revenues is crucial to manage costs allocated to the core mobile business.
Summary
Wilson Asset Management
31 May 2025
$4.82
- Telstra Group held its investor day in May, unveiling its new "Connected Future" strategy aimed at 2030.
- Recent share price strength has been justified by continued growth in dividends, an ongoing buy-back, and solid earnings growth.
- According to Telstra Group, they have built their 'operating muscle' in recent years.
- They are positioning themselves as a leader in connectivity and digital infrastructure.
- Wilson Asset Management continues to hold Telstra Group as a core holding in the WAM Leaders portfolio.
Summary
Sterling Managed Investments
30 Apr 2025
$4.51
- Telstra Group contributed positively to performance during the month.
- Positive movement occurred despite the absence of major company-specific news.
- The stock benefited from broader investor interest in high-quality, defensive Australian names.
- Sterling Managed Investments continues to hold because of Telstra’s strong positioning in mobile.
- Ongoing cost-out execution and disciplined capital management are key components of the investment thesis.
- Management’s focus on return on invested capital and network leadership supports long-term value creation.
- The upcoming T25 strategy update in June may offer further upside catalysts.
Summary
Blackwattle Investment Partners
30 Apr 2025
$4.51
- Telstra (TLS) contributed positively, benefiting from its defensive nature and ongoing share buyback.
- A long-term holding, Telstra continues to leverage its superior mobile network infrastructure, offering broader coverage, faster speeds, and greater reliability than peers.
- Management has delivered cost efficiencies and is increasingly using AI to automate network operations.
- Blackwattle Investment Partners reduced its position during the month as the valuation has become less compelling.
Summary
Endeavor Asset Management
31 Mar 2025
$4.21
- Telstra (TLS) was up 1.7% during March.
- Defensive stocks, especially in the Communications sector, are preferred during volatile markets.
- Endeavor Asset Management expects Telstra to outperform in the mobile and enterprise market.
- Monitoring for signs of rational pricing in the telco market.
- Endeavor Asset Management continues to hold Telstra due to ongoing share buybacks and deleveraging of the balance sheet.
Summary
Endeavor Asset Management
28 Feb 2025
$4.14
- Endeavor Asset Management notes Telstra (TLS) posted a robust first-half FY25 performance.
- Underlying EBITDA rose 6% year-over-year to A$4,248 million, exceeding market expectations by 1%.
- Revenue growth was modest at 1% year-over-year, with disciplined cost management playing a key role.
- A notable positive development was the A$750 million share buyback announcement.
- Looking ahead, Telstra’s midpoint FY25 EBITDA guidance indicates a 3-6% growth range for the full year.
- Despite trading ex-dividend, TLS shares gained 5% in February.
- Shareholders will receive a 9.5 cents per share dividend, translating to a 4.6% annualized fully franked yield.
- There is significant potential for further margin expansion through cost-cutting initiatives.
- Leveraging AI to replace offshore call center staff is one of the efficiency measures being considered.
- More details on these initiatives are expected in the company’s strategic update anticipated at the end of FY25.
Summary
Sterling Managed Investments
28 Feb 2025
$4.14
- Sterling Managed Investments notes that TLS delivered strong performance following a solid first-half result.
- The Mobile division met expectations.
- Significant improvement in the Fixed Consumer & Small Business (C&SB) segment driven by price increases and margin expansion.
- The company’s cost-saving program continues to yield results, with further savings anticipated in its mid-year T30 Strategy update.
- A $750 million share buyback and an increased 5.5% interim dividend reflect its robust financial position.
- With superior network coverage and growing demand for digital infrastructure, TLS remains well-positioned as a market leader.
Summary
Clime Investment Management
31 July 2024
$3.94
- Clime Investment Management views TLS’s recent announcement of increased mobile pricing plans as a significant catalyst for earnings upgrades.
- They took the opportunity to add to their position following this announcement.
- The market initially saw TLS's shift away from CPI-linked pricing as a potential earnings headwind.
- However, TLS's earlier and more substantial increase in prepaid and postpaid mobile pricing (ranging from +3-11%) has shifted this perception.
- Clime believes this move provides a clearer pathway for earnings growth.
- The anticipated dividend is now considered sustainable.
- TLS is characterized as a defensive investment, trading at a FY25e PE of 19x.
- The share price is positioned well for further upward momentum, supported by a forecasted NTM dividend of over 5%.
Summary
Pengana Capital Group
31 July 2024
$3.94
- Pengana Capital Group continues to hold Telstra as a mainstay for the Fund.
- Telstra was a detractor from performance over the previous financial year.
- Telstra’s earnings momentum remains solid, particularly in the core mobile division.
- The inflation linked recurring NBN income stream contributes to over 85% of total valuation.
- Previous commentary addressed factors impacting Telstra’s share price in FY24, especially around pricing announcements.
- Subsequent events have validated the initial analysis regarding pricing outlook.
- Telstra shares are now trading over 15% above lows following the May announcement.
- Most of the share price gain occurred in July.
Summary
Cooper Investors
30 June 2024
$3.61
- Cooper Investors continues to hold its position in Telstra (TLS) despite market negativity regarding FY25 guidance.
- The market reacted negatively to TLS' announcement of removing its annual CPI linked mobile price review.
- Cooper Investors believes the market's reaction was overdone.
- Recent price rises from competitors, including Optus and Telstra's Belong brand, indicate potential for price increases.
- As a provider of a core consumer service, Cooper Investors maintains a positive outlook on TLS' ability to raise pricing across mobile plans in 1H25.
- This pricing strategy aims to offset ongoing cost pressures.
Summary
Pengana Capital Group
30 June 2024
$3.61
- Pengana Capital Group continues to hold Telstra as a mainstay for the Fund despite it being a performance detractor over the past financial year.
- Telstra’s earnings momentum remains solid, particularly in the core mobile division and the inflation-linked recurring NBN income stream, which combined account for over 85% of total valuation.
- Management's decision not to monetize part of the infrastructure business disappointed some investors who expected M&A to unlock value.
- The rising demand for data and connectivity, especially related to AI, has led management to focus on further investment rather than divestiture.
- Pengana believes this strategy has considerable merit and will continue to monitor its execution.
- In May, management announced the removal of the annual CPI linked price increase in mobile contracts, which initially alarmed investors.
- However, an assessment of the competitive landscape suggests this move may force competitors into a vacuum on their pricing strategies.
- Recent competitor price increases validate this strategic move, enabling Telstra to lift its prices for a favorable outcome.
- Telstra generates a high single-digit return on investment for its mobile business, contrasting sharply with its competitors' low single-digit returns.
- For a robust telecoms industry, providers need better returns on investment to make necessary infrastructure investments.
- With clarity restored on pricing outlook, Telstra shares are now trading approximately 15% above lows following the May announcement, with gains primarily occurring post balance date in July.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"It seems Telstra is navigating the tumultuous waters of the telecom sector with surprising agility. With robust earnings and an unexpected buyback, there appears to be a strong case for margin expansion, hinting at a promising FY25 ahead for TLS investors."
Last Updated: 31 Aug 2025
Query The Data
Frequently Asked Questions
Who is investing in Telstra Group Ltd (ASX:TLS)?
Fund managers including Endeavor Asset Management, Pengana Capital Group, Cooper Investors, Blackwattle Investment Partners, Wilson Asset Management, Clime Investment Management, Sterling Managed Investments and BKI Investment Company have invested in Telstra Group Ltd (ASX:TLS).
Why do fund managers invest in Telstra Group Ltd?
Fund managers are investing in Telstra Group Ltd due to its strong first-half FY25 performance, with a 6% year-over-year increase in underlying EBITDA, exceeding market expectations. The company’s disciplined cost management and a surprising A$750 million share buyback highlight its commitment to shareholder value. With a projected EBITDA growth range of 3-6% for FY25 and a 4.6% annualized fully franked dividend yield, Telstra shows potential for margin expansion through efficiency initiatives, including AI-driven cost reductions.
What happened to Telstra Group Ltd (ASX:TLS)?
Fund managers, including Clime Investment Management, maintain their investment in Telstra Group Ltd due to its robust mobile network, consistent dividend stream, and effective cost management. Despite a slight adjustment in holdings following a mixed FY25 financial outlook, Telstra is viewed as a core portfolio asset.