Bharti Airtel share price falls over 2% intraday; brokerage sees around 40% upside in the counter | Here's why

Shares of Bharti Airtel fell around two per cent in BSE intraday trade on Wednesday. The counter was also volume topper on the BSE with a total tradable quantity of 6,05,912 shares worth Rs 45.33 crore in intraday trade on Wednesday.  The telecom scrip has yielded around 13% return in the past one year as on September 7.  

Even though the telecom stock fell on Wednesday and its one-year return was average, brokerage house Prabhudas Lilladher has initiated coverage with a buy rating. It feels Bharti Airel is a compelling play on multiple growth opportunities in an emerging digital economy with a strong brand name. The brokerage was of the view that plans of 5G rollout and strong balance sheet makes this counter even more lucrative. It was also bullish on overall telecom sector, which, according to the brokerage, is expected to enter into a strong growth phase as wireless revenues will grow at 17.7% CAGR to Rs2.9trn over FY22-25E. 

"Bharti Airtel is a leading global telecommunications company operating in 18 countries across Asia and Africa," said Prabhudas Lilladher 

It offers an interesting play of multiple growth opportunities across Mobile, Home services (broadband, fixed line telephone), DTH and Africa business (voice, data cloud etc) with over 491mn subscribers across India and other fast growing under-penetrated geographies, said the brokerage.  

Speaking on the country's upcoming 5G rollout by telecom operators, it said 5G in India is anticipated to be a Rs580-1300bn opportunity by CY27 across connectivity and enterprise market. 

"Bharti’s 5G plan will ride on use of existing 4G infrastructure along with 3.5GHz of midband spectrum (acquired recently). This will result in lower operating cost and better utilization of existing assets, as 5G ecosystem user case develops," it said. 

The brokerage initiated buy coverage on Bharti Airtel with a target price of Rs 1032, an upside of almost 40% on today's low price of Rs 736.10.