ICICI Direct is bullish on Bharti Airtel has recommended buy rating on the stock with a target price of Rs 700 in its research report dated May 20, 2020.
ICICI Direct's research report on Bharti Airtel
Bharti Airtel’s Q4FY20 performance was strong on the operating front. Key highlight was robust 12.5 million (mn) 4G subscribers net adds in the quarter coupled with tariff hike pass through that led to strong 14.3% QoQ growth in ARPU at Rs 154. Consolidated revenue was at Rs 23722.7 crore, up 8.1% QoQ driven by 16% QoQ growth in Indian wireless revenues at Rs 12,953 crore while Africa revenues were up 3.5% QoQ at Rs 6488.8 crore. Consolidated EBITDA margins were at 42.9% (up 70 bps QoQ). The margin expansion was led by Indian margin, up 150 bps QoQ at 42.7%, with Indian wireless margins at 39.2%, up 330 bps QoQ, largely a function of tariff hike.
We maintain our BUY rating on the stock with a DCF based target price of Rs 700/share. The target price increase is expected to be largely led by superior medium term growth over the next three to four years, driven by a favourable industry structure.
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