Buy Bharti Airtel; target of Rs 1010: Sharekhan

Sharekhan's research report on Bharti Airtel

Bharti Airtel reported consolidated revenue of Rs. 35,804 crore, up 19.9% y-o-y (beating our estimates by 1.3%), backed by strong and consistent performance delivery across the portfolio. EBITDA margin improved to 51.5% (up ~230 bps y-o-y/~60bps q-o-q), slightly lower than our estimates of 51.7%. Mobile services India revenues up 20.8% y-o-y, led by continued 4G customer addition and increase in ARPU. Mobile ARPU increased to Rs 193 in Q3FY23 vs Rs 163 in Q3FY22 was slightly below street expectations. Mobile data consumption up by 22.5% y-o-y and consumption per customer was at 20.3 GB per month. 4G data customers were up 21.2 mn y-o-y/6.4 mn q-o-q. Management expressed satisfaction to see lower churn than expected after hiking the entry-level tariff plan in two circles initially and, hence, it has rolled the plan in additional circles. Capex is expected to be elevated given the 5G and rural rollout.

Outlook

We continue to prefer Bharti Airtel, given the company’s industry-leading ARPUs, growing 4G subscriber mix, healthy network capacity, and strong free cash flow (FCF) generation. Hence, we maintain Buy recommendation on the stock with an unchanged price target (PT) of Rs. 1,010.

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Bharti Airtel - 09 -02 - 2023 - khan