Global brokerages raise target price on Bharti Airtel; sees over 20% upside

Global brokerages have raised the target price on Bharti Airtel after the telecom operator announced 20-25 per cent tariffs hikes for various prepaid offerings, including tariffed voice plans, unlimited voice bundles, and data top-ups.

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The most aggressive target price of Rs 925 was put out by Jefferies that translates into an upside of about 25 per cent from Rs 742 recorded on 22 November.

The entry-level tariffed voice plan has been hiked by about 25 per cent, while for unlimited voice bundles the increase in most cases is about 20 per cent.

The company said it has always maintained that the mobile Average Revenue Per User (ARPU) needs to be at Rs 200 and ultimately at Rs 300, so as to provide a reasonable return on capital that allows for a financially healthy business model, said a PTI report.

In tariffed voice plans, the new rate is Rs 99, against the current Rs 79 with 28 days validity and benefits like "50 per cent more talktime worth Rs 99, 200 MB data, 1p/sec voice tariff".

The other categories where hike has been announced are unlimited voice bundles and data top ups.

We have collated a list of recommendations from various global brokerage firms according to a Zee Business TV report:

Jefferies: Buy| Target raised to Rs 925 from Rs 860

Jefferies maintained its buy rating on Bharti Airtel but raised its target price to Rs 925 from Rs 860 earlier.

A 20-25% hike in prepaid tariffs reflects that its focus is moving towards boosting realizations as against gaining market share aggressively, said the note.
 
The global investment bank raised India's mobile estimates by 8-15%. It expects the telecom major to deliver 21 per cent consolidated EBITDA CAGR in FY22-24.

Goldman Sachs: Buy| Target raised to Rs 870 from Rs 840

Goldman Sachs maintained its buy rating on Bharti Airtel but raised its target price to Rs 870 from Rs 840 earlier.

JP Morgan: Overweight| Target Rs 830

JPMorgan maintained its overweight rating on Bharti Airtel with a target price of Rs 830.

The telecom major leads with a tariff hike across prepaid. Revenue and EBITDA to see a significant increase. It is the first step towards ARPU increase, and in the near future peers should follow.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)