Bharti Airtel share hits all-time high on positive outlook on 'multiple fronts', stock jumps 5%

The telecom major Bharti Airtel shares on Tuesday touched an all-time high of Rs 627.95 per share after surging for up to 5 per cent on the BSE intraday trade on Tuesday. The counter has breached its earlier high of Rs 623, which was hit on February 4, 2021.

The stock, in the last one month, has surged approximately 20 per cent from Rs 530 per share on the BSE, as compared to a 4.6 per cent rise in the S&P BSE Sensex during the same period.

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The stock has been surging on multiple fronts such as rejig and upgrade in post-paid and pre-paid tariff plans, negative news about the peer Vodafone Idea and mute but satisfying Q1 results.

Earlier on July 26, 2021, the Supreme Court (SC) rejected the application of telecom companies, including Airtel that sought recomputation of Adjusted Gross Revenue (AGR) dues.

Considering Vodafone Idea’s weak financial position, analysts expect, Airtel has a clear advantage to further gain high-quality subscribers in both pre-paid and post-paid categories. It’s 4G penetration at 57 per cent of its own India, mobile subscribers and ongoing tariff hikes assure growth, they believe.

Bharti continued to showcase its strength in the April-June quarter (Q1FY22) while releasing its otherwise mute earnings during the quarter. Healthy 4G adds, revenue mix improvement, highest-ever home broadband subscriber adds and healthy free cash flow (FCF) generation was the key take away.

Earlier this month, a brokerage firm Goldman Sachs had given a BUY call on Bharti Airtel shares, with a target price of Rs 675 per share. It is expected that the company’s India business to be FCF positive starting FY22, and marginally raise FY22-24 EBITDA estimates by up to 2 per cent. 

Similarly, CITI had also maintained a Buy stance on the telecom company’s shares, with a price target of Rs 660 per share. The brokerage had said that India mobile revenue is in-line, mobile EBITDA growth stronger at over 5 per cent sequential.