The focus of the company is on increasing the market share as well as increasing the ARPU through tariff hike. Brokerage houses are also looking bullish about Bharti Airtel’s stock.
Bharti Airtel Stock Price: Shares of telecom giant Bharti Airtel are seeing a rise today. The company’s stock gained about 1.5 percent and reached a price of Rs 720. Whereas on Friday it closed at Rs 709. The company had informed last week that it would acquire 4.7 per cent stake in Indus Towers. At present, the focus of the company is on increasing the market share as well as increasing the ARPU through tariff hike. Brokerage houses are also looking bullish about the stock of Bharti Airtel and have expected 28 percent return from the current price in the coming days.
Company’s focus on increasing ARPU
Brokerage house ICICI Securities has given an investment advice in Airtel’s stock with a target of Rs 860. In terms of current price of Rs 709, it can give a return of 21 percent. The brokerage says that the focus of Airtel management is on high ARPU. The company may make another tariff hike by the end of CY22. At the same time, this increase in tariff may continue in the next few years. This will increase the income of the company. The company’s India ARPU will get a boost due to the increase in tariff. On the other hand, India EBITDA can also see good growth from pre-hike level. Further, the company may also get some market share from VIL. The focus of the company is on 5G. All this is expected to improve the balance sheet of the company. The company can also do capex further.
Share can be rerated
Brokerage house Motilal Oswal has advised to invest in Airtel stock with a target of Rs 910. In terms of current price of Rs 709, it can give 28 percent return. The brokerage says that due to the tariff hike till FY22-24E, the company’s ARPU is likely to increase by 15 percent. At the same time, the market share of the company is expected to increase, which will increase earnings. The customer base of the company is strong. There are opportunities for growth in non-mobility business. Increasing ARPU will improve the company’s ROCE/FC, due to which rerating of shares is also possible.
The company is reducing the liability
Last week, Airtel informed the stock exchange that it has paid Rs 8815 crore to the Department of Telecom (Government of India). This payment is in respect of spectrum liabilities received in the auction in 2015. The prepayment is for due installment in FY 2027 and FY 2028. In the last 4 months, Airtel has paid Rs 24,334 crore under its deferred spectrum liabilities. Airtel said in the information given to the stock exchange that there was an interest rate of 10 percent on these liabilities and they have been paid. The company continues to focus on financial flexibility through its capital structure.
(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of The Financial Express. Markets are risky, so take expert opinion before investing.)
,