Bharti Airtel hits 52-week high in second straight session; should investors buy or sell?

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Updated: January 20, 2020 3:22:49 PM

The brokerages have maintained 'buy' rating on the stock with an upside up to 13 per cent as the SC verdict is likely to benefit Bharti Airtel and Reliance Jio.

At 1.50 PM, Bharti Airtel was trading 1.61 per cent higher at Rs 508.05 apiece on BSE.

The shares of Bharti Airtel rose as much as 2.54 per cent to hit a 52-week high of Rs 512.70 in the afternoon deals on Monday on BSE. This is the second consecutive session when Bharti Airtel has touched a 52-week high. The stock has been on an upward trajectory since the Supreme Court on January 16, 2020,  dismissed the review petition filed by the telecom companies against AGR (adjusted gross revenue) verdict. At 3.17 PM, Bharti Airtel was trading 1.70 per cent higher at Rs 508.50 apiece on BSE.

According to the brokerages, the apex court’s verdict is likely to benefit Bharti Airtel and Reliance Jio. “Irrespective of the outcome, Bharti Airtel is well prepared and, along with RJio, appears poised for strong market share gains,” Motilal Oswal said in a research note.

“In the absence of any government intervention, the market would turn into a duopoly benefitting incumbents Bharti and RJIO. It will also change industry dynamics and give them better pricing power. We do not rule out government intervention considering the consequences of further consolidation in the telecom space and its impact on the overall business environment,” Edelweiss Securities said in a research note.

The brokerage has maintained ‘buy’ rating on the stock with a target price of Rs 533, an upside of 5 per cent.  “We maintain a positive stance on Bharti and Reliance Jio (RJIO) given their ability to fund the liabilities and gain market share,” Edelweiss Securities said. While Motilal Oswal has also given a ‘buy’ to the stock with a target price of Rs 575, upside of 13 per cent.

Last week, Bharti Airtel had raised $3 billion through a combination of the private placement of shares and an overseas sale of convertible bonds. This amount will be used to repay the AGR liabilities of Rs 35,000 crore. The review petition was filed Bharti Airtel, Vodafone Idea and Tata teleservices to seek a waiver of interest, penalty and interest on penalty on their AGR payment. Bharti Airtel and Vodafone Idea expressed their disappointment over the SC verdict and said that they are evaluating to file a curative petition.

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