INSUBCONTINENT EXCLUSIVE:
Airtel(Photo: Shutterstock)4 min read Last Updated : Sep 19 2024 | 10:21 AM IST
Market capitalisation of major telecom service provider
Bharti Airtel crossed Rs 10 trillion for the first time ever after the company's stock price hit a new high of Rs 1,673.35, gaining 1 per
trillion), have market caps over Rs 10 trillion.
In the past one month, Bharti Airtel has outperformed the market by surging 14 per cent,
as compared to the 4 per cent rise in the BSE Sensex
Thus far in the calendar year 2024, the stock has zoomed 62 per cent, compared to the nearly 16 per cent rally in the benchmark
index.
Bharti Airtel is a global communications solutions provider with more than 550 million customers in 17 countries across South Asia
integrated communications solutions provider and the second largest mobile operator in Africa.
Bharti Airtel saw consistent strong revenue
growth in mobile services, which establishes its execution capabilities and expansion in market share win that continues.The improvement in
the company's business risk profile is supported by recent broad-based tariff hikes of 17-19 per cent on average, rolled out by Airtel in
June 2024, which is expected to boost its average revenue per user (ARPU).This, accompanied with rising data usage with the adoption of 5G
services leading to subscribers up-trading, will continue to drive growth in ARPU over the near- to medium-term, according to
analysts.
Bharti Airtel has a strong focus on quality customers with increasing ARPU and revenue
The management is confident of gaining industry leading growth backed by robust rural penetration and a superior services portfolio.The
company's capex, however, will remain moderate in FY25.
Management expects ARPU to improve from the current level of Rs 211 due to a
Aided by strong customer conversion from 2G to 4G/5G and other services, the company continues its ARPU trajectory and expects it to reach
Rs 300 going forward.Early signs of transmission are encouraging with modest SIM consolidation at the lower end
Full flow through will take two quarters, the company's management said.
Analysts at JM Financial Institutional Securities maintain a
'Buy' rating on Bharti, with a 3-year target price of Rs 2,140 as the brokerage firm believes India's wireless business tariff hikes are
likely to be more frequent, going forward, given the consolidated industry structure
beneficiary of higher tariffs given the sticky and premium quality of its subscribers
said in a company update.
The net leverage of Bharti Airtel improved to around 2.6 times in fiscal 2024 (compared with 3 times in fiscal
2023), despite large dues pertaining to spectrum purchase and adjusted gross revenue (AGR) led liabilities.Furthermore, with the part
payment of the Department of Telecommunications (DOT) liabilities in the first quarter of this fiscal, the net leverage is likely to improve
to around 2.5 times.As strong cash flow from the business is expected to contribute towards steady deleveraging, net leverage is expected to
improve to even below 2.5 times in the near term, according to CRISIL Ratings.
From a long-term perspective, analysts at Axis Securities
believe Bharti Airtel would continue to gain market share, backed by the highest penetrations, and with minimum capex requirements.With a
the brokerage firm maintain their 'Buy' rating on the stock, given the company's superior margins, stronger subscriber growth and higher 4G
