Bharti Airtel shares outshine market after Jefferies double-upgrades to 'buy'

Bharti Airtel shares swung between gains and losses in a narrow range on Friday, but managed to fare better than the headline indices in a market-wide sell-off, after Jefferies gave a double upgrade to the private sector telecom company and raised its target price for its stock by Rs 50. The Bharti Airtel stock made it to the green intermittently amid volatile trade, moving within a range of Rs 11 around the flatline.

The brokerage now has a 'buy' call on Bharti Airtel, as against 'hold' earlier, with a target price of Rs 900 — which implies upside potential of more than 16 per cent from its closing price on Thursday.  

Jefferies has pegged 13 per cent growth in Bharti Airtel's average revenue per user (ARPU) over the three-year period ending March 2025, driven by market share gains in 4G, hikes in voice tariffs and improving tariff outlook owing to government support for rival Vodafone Idea.

At the strongest level of the day, Bharti Airtel shares rose as much as 0.7 per cent from their previous close to touch Rs 779 on the upside with strong volumes. By 3:15 pm, as many as 1.4 lakh Bharti Airtel shares changed hands on BSE as against a daily average of 74,000 in the past two weeks, according to provisional exchange data. 

The brokerage said that Bharti Airtel's market share gains are also likely to accelerate owing to its 5G rollouts. Earlier this month, Bharti Airtel anounced the launch of 5G services in 5G services in 125 cities, taking the total number of cities where its 5G Plus service is available to more than 265. 

Bharti Airtel said it is on track to cover all towns and key rural areas with its 5G services by March 2024.

The upgrade in rating by two notches by Jefferies comes after a 13 per cent fall in the Bharti Airtel stock since November 2022. 

The brokerage said it expects Bharti Airtel to take up a tariff hike of 15 per cent towards end-2023 — which it believes to be the only hike till March 2025.

This week, CLSA maintained a 'buy' call on Bharti Airtel with a target price of Rs 1,015, suggesting an upside of 31 per cent in the stock.  

According to the brokerage, a hike of 57 per cent across the telecom company's entry-level plans in 19 out of 22 circles can boost its ARPU by three per cent.

Bharti Airtel share price: Historical price 

Bharti Airtel shares have risen almost 11 per cent in the past one year, a period in which the Nifty50 headline index has gained 4.9 per cent.

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