Bharti Airtel’s share cost fell as substantially as 2% today, being the only Sensex constituent in red, right after the business reported a fall in fiscal fourth-quarter net profit and India mobile income. Bharti Airtel stock was down 1.8% to Rs 539 per share in the late morning trade. However, brokerage firms nevertheless stay bullish on the stock, seeing substantial upside possible. Earlier Monday, Bharti Airtel reported that January-March net profit fell 11.12% on a quarter-on-quarter basis, even as the business swung from a net loss in the identical quarter a year ago. Revenue from India mobile services small business fell 4.5%, led by the new interconnect usage charges (IUC) regime.
Key figures from Bharti Airtel’s Q4 FY 2020-21 outcomes:
-Average Revenue Per User (ARPU) has fallen in the course of the quarter, but is nevertheless ahead of its peers.
-Jio’s ARPU stands at Rs 138.2 though that of Bharti Airtel is Rs 145.
-Bharti Airtel added 13.4 million subscribers in January-March.
-In comparison, Jio added 15.4 million in the course of the quarter.
-Bharti also added 274k fixed broadband subscribers in the course of the quarter, the highest ever quarterly addition.
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Brokerages bullish here’s what they say about Bharti Airtel stock:
Goldman Sachs
-Rating: ‘Buy’ (unchanged)
-Target cost: Rs 665 (reduce from Rs 670)
-EBITDA estimate reduce by 2% via fiscal year 2023-24
-Expects quick-term headwinds to earnings due to COVID-19 (moderation in subscriber additions) and competitors (ARPU stress)
-Forecast Bharti’s wireless small business to provide 20%+ income and EBITDA development for the next two years
Expects Bharti Airtel to obtain industry share: “We think the market is under-appreciating a ‘market share re-allocation’ scenario, and we continue to believe one of the two outcomes – tariffs moving up, or market share re-allocation, is highly likely in the near term… Bharti continues to outperform peers, with the company’s revenue market share higher by 110bps/390bps over the last one/five quarters.”
Expects ARPU to stay muted: “With new offers recently announced by Bharti and Jio, we expect ARPU for telcos to stay muted in the June quarter as well, with growth likely to resume from 2HCY21E in the event of a tariff hike.”
UBS
-Rating: ‘Buy’
-Target cost: Rs 665
-Quarterly outcomes are healthful
-Need to see how the second wave of Covid-19 impacts subscriber additions and ARPUs
Motilal Oswal
-Rating: ‘Buy’
-4G subscriber addition, superior network capacity, are positives for Bharti Airtel