With 10% jump in stock price, Bharti Airtel is back at 5th position in market cap

Our Bureau Chennai | Updated on May 19, 2020

A Bharti Airtel advertisement board   -  REUTERS

Analysts remain bullish on healthy ARPU, 4G subscription despite Q4 loss

Brokerages and investment advisors continue to remain bullish on Bharti Airtel despite the company reporting a ₹5,237-crore loss for the quarter ended March 2020.

Shares of Bharti Airtel jumped 10.2 per cent on Tuesday at ₹593, as some brokerages increased the price target on the company. They believe its domestic business has reported a strong show, with healthy ARPU (average revenue per user) growth and subscriber addition in 4G network. Its Africa business, too, exceeded most analysts estimates.

Thanks to a strong show by the stock at the bourses, Bharti Airtel regained the fifth spot by market capitalisation. The company now commands a full market capitalisation of ₹3.23-lakh crore, next only to Reliance Industries (₹9.18-lakh crore), Tata Consutancy Services (₹7.33-lakh crore), HDFC Bank (₹4.68-lakh crore) and Hindustan Unilever (₹4.67-lakh crore). At a market cap of ₹2.83-lakh crore, Infosys stands at the sixth position.

Bharti Airtel on Monday reported a consolidated net loss after exceptional items of ₹5,237 crore for the fourth quarter ended March 31, compared to a net profit of ₹107 crore in the corresponding period last year. However, consolidated revenues during the quarter grew 15 per cent year-on-year (YoY) to ₹23,723 crore (₹20,602 crore).

According to Motilal Oswal Securities, Airtel delivered strong 14 per cent Q-o-Q average revenue per user (much ahead of peers) on the recent price hikes and healthy 4G subscriber adds.

Morgan Stanley remains overweight on the stock with a price target of ₹575, as it sees strong ARPU in India wireless, healthy increase in data sub, high capex, provision for a one-time spectrum charge and net debt as key positives. Similarly, CLSA and Credit Suisse maintained their buy stance on Bharti Airtel with a price target of ₹600 and ₹670, respectively.

Published on May 19, 2020

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