Today’s fall in Airtel stock can be a great opportunity for investors. Many big brokerage houses are looking bullish about Airtel’s stock.
Airtel Stock Price: Today pressure is being seen in the shares of telecom company Airtel. The stock fell by about 2 per cent to Rs 666, while it closed at Rs 689 on Friday. However, today’s fall can be a great opportunity for investors. Many veteran brokerage houses are looking bullish about Airtel’s stock and they say that it can prove to be a winner in the entire industry. The company will get the benefit of sustainable revenue growth and strong execution with the tariff hike. There is a possibility of rerating in both India and Africa business.
Revenue growth better than industry
Brokerage house Motilal Oswal says that when it comes to the telecom industry, the revenue growth in Bharti Airtel has been better. While the revenue growth for the industry has been 4 per cent on a quarterly basis, Airtel has seen revenue growth of 7 per cent, while RJio has been at 3 per cent. On a quarterly basis, the market share of Airtel has increased by 90 basis points to 34.9 percent, which is the highest. The growth of the company has been 10 percent on a quarterly basis in Metro and A circle.
Valuation and target
The brokerage house says that the company’s outlook looks strong due to Google’s Rs 5,200 crore fund infusion and strong operating cash due to tariff hike. The company should show a healthy delivering of Rs 8000-10000 cr (6%) and a regular annual delivering of Rs 20000 cr (15-20%). There is a potential for re-rating upside in both India and Africa business. The company is getting support from stable revenue growth. The brokerage house has given a target of Rs 910 while advising investment in the stock. In terms of current price of Rs 666, it can give 36 to 37 percent return.
Market share will increase!
Brokerage house ICICI Securities said the industry AGR grew by 9.4 per cent year-on-year and 4.4 per cent quarter-on-quarter due to the tariff hike. Bharti Airtel has achieved 90bps AGR market share on a quarterly basis. This shows that the company’s execution is strong and it can garner more market share.
Global brokerage too bullish
Brokerage house Jefferies has advised to invest in Bharti Airtel and has set a target of Rs 860. While giving investment advice, brokerage house City has given a target of Rs 875. Brokerage house Jefferies says that the company’s decision to buy stake in Indus Towers is right, but it raises questions on capital allocation. At the same time, the city says that the benefit of this decision will be seen further. At the same time, CLSA has advised to invest in the stock with a target of Rs 915.
(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.)
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