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TradingBells
Bharti Airtel (Buy)
CMP: ₹382.65
Target: ₹440
Bharti Airtel is an Indian telecommunications provider promoted by Sunil Mittal in 1984. It is the third-largest provider of mobile telephony services in India after Jio and Vodafone Idea.
In the recent past, Reliance Jio had disrupted the telecom market by its low-cost products which brought a wave of changes in this industry since its launch. However, Airtel responded to the business in a positive manner by not offering any freebies, in fact, it has made many changes to its plan to increase the revenue which will add up to its profitability.
Performance highlights — FY19: a) Bharti Airtel, reported Gross Revenue of ₹80,780 crore during FY19, down 2.2 per cent percent from ₹82,639 crores during FY18; b) Profit after-tax declined by 16.2 per cent to ₹24,828 crore in FY19 against ₹29,626 crore in FY18; c) It has paid dividend consistently for many years, with the dividend yield rising to as high as 244 per cent in FY19 as against 194 per cent in FY18 and 11 per cent in FY17.
Outlook and valuation: Despite tough competition in the telecommunications industry, Airtel is one company which has managed to stay strong. They have focussed on increasing their ARPU by measures such as introduction of minimum commitment plans, focus on digital innovations and offering differentiated services to its premium customers. We can see the stock scale to new highs even approaching its all-time high ₹500.
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