Bharti Airtel clocks best week in three months on bullish Jefferies note, Hexacom shines too

Jefferies' projection showed Airtel shares could see Rs 1,920 levels by December 2025, which is 18% higher from Thursday’s close.

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Shares of Bharti Airtel as well as Bharti Hexacom staged a solid rally on large volumes, each rising 4.4% at close on December 13, with Airtel clocking its best day in seven weeks and the biggest week in three months.

A block deal involving 13.2 lakh shares of Bharti Airtel was also reported, potentially to the tune of Rs 212.60 crore. The momentum in Airtel shares got further leg up after global brokerage Jefferies added it to its list of top picks for 2025. Jefferies' projection showed Airtel shares could see Rs 1,920 levels by December 2025, which is 18% higher from Thursday’s close.

The shares are now inching closer to its all-time high of Rs 1779. Airtel saw a combined traded volume of 2 crore shares on NSE as well as BSE, which was more than double its one-month average.

The ruboff was seen on Bharti Hexacom too, which soared in late trade to rise by over 4%, with combined traded volume more than the one-month average at 8 lakh share. September data showed the company is 70% held by promoter Bharti Airtel. Since listing in April, the shares are higher by 85%.

JM Financial recent had a very bullish note on the stock, stating that it could potentially double in 3-4 years on the back of 15-17% compounding in EBITDA. "We see Bharti Hexacom as a mid-cap pure-play on wireless ARPU growth story vis-a-vis Bharti (which sees 25-30% of its value coming from other than India wireless business)," said the JM Financial note, released in early December. It cited a structural uptrend in ARPU via regular tariff hikes as well as data monetisation as Key triggers for the company.

Bharti Hexacom reported a net profit of Rs 253 crore for the September quarter against a loss of Rs 184 crore in the same period last year. The growth was led by tariff repair, which pushed up ARPU increase and smartphone additions.

Bharti Airtel also featured in Motilal Oswal's recent Wealth Study as among its list of top largecap wealth creators between 2019-2024, as well as the third biggest wealth creator in the same period, generating Rs 5.45 lakh crore of shareholder wealth. Increased competition had bruised the telco in 2020, said the report, when the company incurred severe loss, and the share price halved from 2018 highs.

MOSL note cited a number of reasons for the rebound in Airtel's fortunes.

-Since FY19, there have been three rounds of tariff hikes, benefitting the telecom player.
-Centre's stance towards the sector changed from 'revenue maximization' to ensuring 'adequate returns' in order to fund network expansion
-Increased network investments to deal with an exponential surge in data consumption
-Bharti tapped both debt and equity route along with asset monetization to raise nearly Rs 1.5 lakh crore between FY16-22, thus helping fund expansion plans.
-Bharti's focus moved from market share to gaining premium subscribers.

Raamdeo Agrawal, Chairman of Motilal Oswal Financial Services said Bharti Airtel not only survived but thrived in this competitive landscape, adding, “I believe Bharti Airtel’s best days are still ahead.”

The company has also been ramping up its 5G infrastructure with equipment orders to leading suppliers.

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