Airtel stock gains 1.6%; Sunil Mittal’s Rs 300 ARPU target adds to tariff hike optimism

Bharti Airtel stock has gained 16 percent in the last three months, outperforming Nifty’s 12 percent rise.

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Bharti Airtel's share price rose 1.6 percent on February 27, amid growing optimism around hike in telecom tariffs and ARPU (average revenue per user) at higher levels.

Bharti Airtel stock ended the day at Rs 1,127.5 on the NSE. The share price has gained 16 percent in the last three months, outperforming Nifty’s 12 percent rise.

Meanwhile, the telecom firm's Chairman Sunil Bharti Mittal’s statement reiterating the ARPU target of Rs 300 also seems to have bolstered the investor sentiment around the stock. “As I said at the Mobile World Congress seven years back, we need to be at the Rs 300 ARPU level. First pitstop was Rs 200. That’s taken five to six years. But it’s taken a long time, and the costs have gone up… inflation has been there. So, Rs 300 is probably relevant today or not. But at least let’s get there,” Sunil Mittal said in an interview with Moneycontrol.com.

Also read: MC Exclusive: Tariffs are going up, need to be at Rs 300 ARPU level, says Sunil Mittal

In Q3FY24, Bharti Airtel reported an ARPU of Rs 208, rising from Rs 193 a year ago. The gain in ARPU was in line with analyst estimates, and was aided by the consistent strategy of acquiring high-value customers and improved realisations. The company’s revenue for the October-December quarter was at Rs 37,900 crore, while net profit grew to Rs 2,442.2 crore, missing Street estimates.

Mittal also said that Airtel is becoming more and more a digital company than a telecom company to generate new revenue streams for the group, noting the company’s ownership of a payments bank, shareholding in a tower company, and presence in Africa.

On the impending launch of its satellite internet service OneWeb, Mittal said that the company is ready, and is waiting for the final permission from the government. He noted Elon Musk’s Starlink as a formidable competitor. “You can’t underestimate them.” But he clarified that Airtel OneWeb’s primary focus would be on B2B, and not B2C at all.