Fund Manager Summary on Telstra Group Ltd (ASX:TLS)
In March 2026, Perpetual Asset Management commented that Telstra Group Ltd (ASX:TLS) delivered a strong result with earnings up 8% and cash profit up 17%, supporting a dividend uplift of 10.5% as cost control and lower capex versus depreciation boosted cash generation. Fund managers broadly view Telstra as a defensive, cash-generative core holding underpinned by mobile network leadership and annuity infrastructure (NBN, towers, fibre), disciplined capital allocation through dividends and buybacks (buyback increased from $1bn to $1.25bn) and ongoing cost-out/automation that has improved cash conversion; recent comments place greater weight on cash profits, balance sheet deleveraging and evidence of operating leverage, prompting some managers to hold or add while others moderate positions as valuations have become less compelling. Key opportunities cited are monetisation of superior mobile scale, predictable annuity-like revenue streams and further dividend/buyback capacity driven by maintenance capex being lower than accounting depreciation, while principal risks include sustainability of mobile earnings growth amid cost-of-living and competitive pricing pressures, the reliance of smaller business segments to absorb infrastructure overheads, potential regulatory or industry-return headwinds, and valuation sensitivity that has led some funds to take profits; actionable considerations are to monitor cash profit versus accounting profit, capex trends and depreciation, buyback execution and size, dividend policy and franking, mobile subscriber and ARPU trends, and signs of industry pricing rationality.
Commentary From The Managers
There are 18 insights from 12 fund managers regarding their investment in Telstra Group Ltd (ASX:TLS) available on Thesis Tracker.
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Updates are made available to members within 12 hours of being released. The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Plato Investment Management
2 Mar 2026
$5.23
Summary
- Plato Investment Management believes Telstra is performing well and continues to hold because the mobile division is delivering healthy mid-single-digit earnings growth and the company maintains a shareholder-friendly capital management framework.
- Mobile division is core: sustained mid-single-digit growth over recent years driven by a combination of pricing increases in an inflationary period and subscriber growth.
- Drivers: pricing lever has been pulled and competitor network/outage issues have helped Telstra gain subscribers.
- Key risk — cost-of-living pressure: rising household costs could push customers to lower‑value plans, threatening ARPU and earnings sustainability.
- Capital management: progressive dividend policy and share buybacks provide strong returns to shareholders.
- Main concern: uncertainty over the long‑term sustainability of mobile earnings growth underpins the decision to hold.
Perpetual Asset Management
2 Mar 2026
$5.23
Summary
- Perpetual Asset Management believes Telstra is a buy for us and continues to hold because its underlying cash earnings and dividend trajectory are improving while management is effectively controlling costs and CapEx.
- Strong result: statutory earnings +8%; cash profit +17%; supported a 10.5% dividend increase.
- Accounting vs cash: accounting profits are currently lower than cash profits because Telstra is depreciating assets at a higher rate than current CapEx spend.
- Efficiency-led CapEx reduction: identified efficiencies allow CapEx to fall without harming performance.
- Cost control: management is cutting costs and “controlling the controllables,” improving cash generation.
- Mobile growth: mobile subscribers rose 5% last period, showing ongoing momentum in a core segment.
- Outlook: the business is humming and we expect further dividend growth going forward.
Pengana Capital
28 Feb 2026
$5.23
Summary
- Pengana Capital believes Telstra's operational improvements and stronger capital returns have de‑risked the investment; reduced their position because the market has rewarded this outperformance and we crystallised gains.
- Proof point: management delivered higher dividends and buybacks, demonstrating tangible capital returns to shareholders.
- Improving returns: evidence of better performance through higher margins and improved capital efficiency.
- Valuation discipline: strong operating performance led to a market rerating, prompting selective profit taking.
- Ongoing approach: Pengana Capital continues to take profits in Telstra as operating gains are realised while monitoring further execution on margins and capital allocation.
Pendal Group
23 Feb 2026
$5.14
Summary
- Pendal Group believes Telstra remains a dependable, predictable defensive and continues to hold because strong cash generation, a more flexible dividend policy, disciplined cost control and an enlarged buyback program underpin growing shareholder returns.
- 1H26 result was in line with expectations and management reiterated full‑year guidance.
- Mobile remains the primary growth engine, delivering solid performance driving group growth.
- Dividend surprise: management increased the dividend to 10.5cps (vs expectations of 10cps) and signalled dividends will not be constrained to being fully franked, allowing steady dividend growth over time.
- Cash vs accounting profits: cash profits are well in excess of accounting profit, supporting sustainable distributions.
- Operating leverage: demonstrated through disciplined cost control with fixed costs and sales costs both down 2% in absolute terms.
- Buyback support: the on‑market buyback was increased from $1bn to $1.25bn, with roughly half completed to date.
- Outlook & valuation: cash EBIT is expected to grow over 12% this year, and Telstra trades on a cash PE of 20.5x, making it attractive relative to other predictable defensives.
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.
Clime Investment Management
31 Aug 2025
$4.98
Summary
- 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.
BKI Investment Company
30 June 2025
$4.84
Summary
- 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.
Pengana Capital Group
30 June 2025
$4.84
Summary
- 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.
Wilson Asset Management
31 May 2025
$4.82
Summary
- 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.
Blackwattle Investment Partners
30 Apr 2025
$4.51
Summary
- 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.
Sterling Managed Investments
30 Apr 2025
$4.51
Summary
- 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.
Endeavor Asset Management
31 Mar 2025
$4.21
Summary
- 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.
Endeavor Asset Management
28 Feb 2025
$4.14
Summary
- 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.
Sterling Managed Investments
28 Feb 2025
$4.14
Summary
- 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.
Pengana Capital Group
31 July 2024
$3.94
Summary
- 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.
Clime Investment Management
31 July 2024
$3.94
Summary
- 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%.
Pengana Capital Group
30 June 2024
$3.61
Summary
- 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.
Cooper Investors
30 June 2024
$3.61
Summary
- 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.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
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, BKI Investment Company, Pendal Group, Perpetual Asset Management, Plato Investment Management and Pengana Capital have invested in Telstra Group Ltd (ASX:TLS).
Why do fund managers invest in Telstra Group Ltd?
Fund managers invest in Telstra Group Ltd due to its strong financial performance and solid growth prospects. With a disciplined approach to cost management, Telstra reported a 6% year-over-year increase in underlying EBITDA and announced a $750 million share buyback. The company's dominant position in the mobile market, coupled with a reliable 4.6% annualized dividend yield, enhances its appeal for income-focused investors. Ongoing improvements in operational efficiency and network infrastructure further support its risk/reward profile.
What happened to Telstra Group Ltd (ASX:TLS)?
There have been no recent updates from fund managers regarding Telstra Group Ltd although 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 previously commented.
What is the short interest in Telstra Group Ltd (ASX:TLS)?
The short interest in Telstra Group Ltd (ASX:TLS) is 0.36% which makes it the 313th most shorted stock on the ASX. Of the 11.3B shares that Telstra Group Ltd has on issue, 40.1M have been sold short.
What does Telstra Group Ltd (ASX:TLS) do?
Telstra Group Ltd. engages in the provision of telecommunications and technology services. It operates through the following segments: Telstra Consumer and Small Business (TC&SB), Telstra Enterprise (TE), Networks and IT (N&IT), Telstra InfraCo, and All Other. The TC&SB segment consists of telecommunication, media, and technology products and services to consumer and small business customers, using mobile and fixed network technologies. The TE segment offers telecommunication services, technology solutions, network capacity and management, unified communications, cloud, security, industry solutions, and monitoring services to government and large enterprise. The N&IT segment maintains reliability and security network platforms and data. Telstra InfraCo covers telecommunication products and services delivered over Telstra networks to other carriers, carriage service providers, and internet service providers. The company was founded in 1992 and is headquartered in Melbourne, Australia.