CLSA maintained a buy rating on Bharti Airtel with a target price of Rs 1015, indicating an upside of more than 31 per cent
CLSA maintained a buy rating on Bharti Airtel with a target price of Rs 1015, indicating an upside of more than 31 per cent from the current market price. The telecom major is leading India’s mobile tariff hikes.
The research firm believes that the recent tariff hikes, which came 14 months ahead of the general elections, can boost the average revenue per user (ARPU) by 3 per cent.
Bharti Airtel’s CEO has also indicated that there may be further tariff hikes by mid-2023. Additionally, the acceleration in post-paid subscriber growth is expected to further boost ARPU. Bharti Airtel is also on track for nationwide 5G rollout by March 2024, the research firm said.
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CLSA has forecasted a consolidated/India mobile earnings before interest, taxes, depreciation, and amortization (EBITDA) compound annual growth rate (CAGR) of 15/23 per cent to FY25.
The telecom major reported a sharp 92 per cent year-on-year (YoY) rise in consolidated net profit for the December quarter to Rs 1,588 crore. Its revenue from operations increased by 20 per cent YoY to Rs 35,804 crore.
However, the net profit was lower than the average estimate of Rs 2,673 crore, but revenue was higher than the estimated Rs 35,299 crore. Sequentially, the topline grew 3.7 per cent, while the bottomline dropped by a sharp 47 per cent.
The total expenses in the third quarter rose to Rs 17,351 crore from Rs 15,164 crore a year ago, and Rs 16,933 crore a quarter ago. Spectrum usage charges in the quarter increased 4 per cent YoY to Rs 2,842 crore but were down 4 per cent sequentially.
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Consolidated operating profit, calculated as earnings before interest, taxes, depreciation, and amortisation (EBITDA), came in at Rs 18,601 crore; with the operating margin improving 205 basis points YoY to 52 per cent.
The India business posted an EBITDA of Rs 13,167 crore, and margins expanded 299 bps to 52.7 per cent. The India business posted quarterly revenue of Rs 24,962 crore, up 19.4 per cent YoY. The mobile services India revenue grew 21 per cent YoY, led by continued 4G customer addition and an increase in ARPU.
At 10:00 hrs Bharti Airtel was quoting at Rs 771.50, up Rs 5.05, or 0.66 per cent on BSE. It has touched an intraday high of Rs 795.50 and an intraday low of Rs 770.40.
