Shares of telecom giant Bharti Airtel soared to fresh 52-week high on Monday after reports that the firm had filed application in the Supreme Court for a review of its judgment on Adjusted Gross Revenue issue.
Shares of telecom giant Bharti Airtel soared to fresh 52-week high on Monday after reports that the firm had filed application in the Supreme Court for a review of its judgment on Adjusted Gross Revenue issue. Bharti Airtel shares gained more than 8.2% to hit the day’s high at Rs 455.75 on BSE. The stock ended 7.2% higher at Rs 451.30 to energe as the biggest gainer on the Sensex. The Sunil Bharti Mittal-led telecom firm has filed an appeal for the interest and penalty waiver and not on seeking extension, according to media reports.
Earlier On October 24, 2019, the Supreme Court upheld the Department of Telecommunications’ (DoT) demand that non-telecom revenues should be part of the AGR (Adjusted Gross Revenue). In the quarter ending September, Bharti Airtel reported its biggest consolidated net loss at Rs 23,045 crore on the back of provisions for the licence fee and spectrum usage charge based on the definition of the Supreme Court of what constitutes adjusted gross revenue. This the second consecutive loss after 14 years. The company made an exceptional charge during the quarter of Rs. 22,394 crore (net of tax) which comprises a charge on account of licence fee and SUC of Rs. 16,815 crore and Rs. 11,635 crore, respectively.
Last week, the Union Cabinet decided to defer thousands of crores of rupees in dues from the telecom companies towards spectrum payments, freeing up some cash for the firms reeling under immense financial stress. The spectrum payment installment dues have been decided to be deferred from the year 2020 to 2022, without any increase in the charges, Finance Minister Nirmala Sitharaman announced. In total, the government’s mega relief came to more than Rs 42,000 crore to the sector.
Taking stock of the firm’s Q2 results, brokerages have maintained ‘buy’ rating on Bharti Airtel. Global brokerage UBS has maintained ‘Buy’ call on Airtel with a target price of Rs 415 per share. Jefferies has upgraded Bharti Airtel to hold from underperform and raised target to Rs 407 from Rs 280 per share. “We expect price increase from Q1FY21, though valuations are at 9x FY22e mobile EBITDA. We factor in 20 percent price hike in FY21, but the risk in postpaid & enterprise keeps upside limited,” Jefferies said in its report.