Bharti Airtel share price falls 5% as promoter sells stake; right time to buy? Check target price

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Published: May 26, 2020 10:52 AM

Bharti Airtel, Bharti airtel share priceThe promoter firm Bharti Telecom planned to dilute 2.75 per cent stake with floor price of Rs 558 per share through secondary placement

Bharti Airtel share price fell as much as 5.37 per cent to Rs 561.10 apiece on BSE in Tuesday’s trade on reports that promoter Bharti Telecom has sold some of its equity stake in the telecom services provider through secondary placement. Bharti Airtel was the top Sensex laggard in today’s trade in comparison to a 1.04 per cent rise in S&P BSE Sensex. The promoter firm Bharti Telecom planned to dilute 2.75 per cent stake with floor price of Rs 558 per share through secondary placement, according to a Financial Express report. As of March, Bharti Telecom held about 38.79 per cent stake in Bharti Airtel which will get reduced to 36.04 per cent after the deal. The total promoter shareholding as per exchange data currently stands at 58.98.

Last week, the telecom giant acquired a strategic stake in Gurgaon-based AI-focused start-up Voicezen for an undisclosed amount. The investment will give Airtel preferred access to Voicezen’s technologies, which will offer real-time analytics and insights to make Airtel’s conversations with its customers more engaging. Bharti Airtel posted a net loss of Rs 5,237 crore for the quarter ended March 31, 2020. The company had recorded a profit of Rs 107.2 crore for the same period in the previous fiscal. Motilal Oswal has recommended to ‘buy’ Bharti Airtel shares, as the company “has delivered strong execution in the last two quarters, with industry-leading revenue growth, ARPU increase and 4G subscriber adds”. “Bharti Airtel is well placed to drive additional ARPU growth and market share gains given the vulnerability of its peers,” Motilal Oswal said in its research report. An upside of 26.5 per cent would be required to take it to levels of Rs 710 per equity share predicted by Motilal Oswal.

“Bharti Airtel’s Q4FY20 results surprised positively with India mobile ARPUs rising by a sharp 14% q-o-q and strong 10 m data subscriber additions despite sharp tariff hikes,” Jefferies said in its research note. The brokerage reiterated ‘buy’ to the stock with a revised target price of Rs 660 per share, an upside of over 17 per cent.

“Telecom operators have increased tariffs by nearly 35 per cent in Nov’19. There is a possibility of another round of tariff hikes by telecom companies in FY21 given that tariffs are still very low. If Vodafone Idea goes out of business, Bharti would benefit significantly from addition of subscribers,” brokerage and research firm Angel Broking said. The firm has given an ‘accumulate’ rating to the stock. From current levels, the stock will have to jump 11 per cent to touch the target price of Rs 629 pegged by Angel Broking.

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