Buy Bharti Airtel; target of Rs 1680: Sharekhan

Sharekhan's research report on Bharti Airtel

Company has continued to narrow the revenue market share (RMS) gap with industry leader Reliance Jio, improving its RMS to 37.9% up 35/139 bps on q-o-q and y-o-y basis respectively. We believe tariff hikes of 15-20% are imminent post the conclusion of telecom spectrum auction with subsequent frequent tariff hikes going forward to aid the needed tariff repair. After an elevated capex in FY24, a decline in capex intensity in FY25 and possible tariff hikes is likely to aid a meaningful uptick in FCF generation.

Outlook

We reiterate a Buy on Bharti Airtel with a revised PT of Rs. 1680 owing to its industry leading ARPU, incremental revenue market share gains and as it is well placed to be a key beneficiary of the expected tariff hikes over FY25-26E.

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