HDFC Securities bullish on Bharti Airtel, says hopeful of ARPU improvement in medium term

By: |
Published: January 22, 2018 6:36:43 PM

HDFC Securities has maintained 'buy' call on Bharti Airtel despite the telecom major posting dismal Q3 results last Thursday, reported over 39 percent fall in its consolidated net profit for the third quarter ended December 31, 2017, to about Rs 306 crore.

bharti airtel, airtel rs 149 plan, airtel rs 149 plan revised, reliance jio, reliance jio rs 149 plan,HDFC Securities has maintained ‘buy’ call on Bharti Airtel despite the telecom major posting dismal Q3 results last Thursday. (Reuters)

HDFC Securities has maintained ‘buy’ call on Bharti Airtel despite the telecom major posting dismal Q3 results last Thursday, reported over 39 percent fall in its consolidated net profit for the third quarter ended December 31, 2017, to about Rs 306 crore. The company’s net profit stood at Rs 504 crore in the same period previous fiscal. “With improvement in industry structure to a three-player market, we pin our hope on ARPU improvement in medium term,” HDFC Securities said in its report. HDFC Securities has set the target price at Rs 600 per share.

However, it also said that Jio can further disrupt Indian telecom till it achieves a critical subscriber base. Jio recent price cut and incumbents matching the same means delayed recovery in ARPU. “Nevertheless, Bharti is aggressively rolling out 4G VoLTE capacity (key strength of Jio) matching the competitive tariffs for market share retention,” it added.

Bharti Airtel operates in 17 countries across South Asia and Africa. Airtel provides GSM, 3G and 4G LTE mobile services, fixed line broadband and voice services depending upon the country of operation. Last week, CLSA and Nomura had also maintained ‘buy’ call on Aitrel. CLSA said the stock will see improved valuations. Last week, it maintained a ‘buy’ rating on the share with a target price of Rs 640 implying an upside of nearly 29 percent. Airtel’s mobile APRU for India in Q3 has surprised positively, said CLSA. The brokerage estimates Profit After Tax (PAT) to be in between 1-9 percent by FY19-21.

Nomura, too, maintained a ‘buy’ call on Bharti Airtel with target unchanged at Rs 625 per share implying an upside of nearly 26%. For Nomura, the revenue target miss is driven by India mobile and comes in at 6 percent below estimates.

Concerns

Merrill Lynch offloaded shares worth Rs 1,931 crore in telecom operator Bharti Airtel, through an open market transaction, PTI reported. The shares were disposed of at an average price of Rs 499.1 apiece, valuing the transaction at Rs 1,931.23 crore, the data showed. At the end of December quarter, Merrill Lynch held 5.09 crore shares of the telecom major. The shares were bought by SRS Partners (Cayman) LLC.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1RIL shares jump nearly 5% to hit all-time high on biggest ever quarterly net profit, Jio turning profitable
2Heard about BananaCoin yet, the latest in cryptocurrency world? Guess what is its price linked to?
3This small-cap IT stock below Rs 60 doubled in last 3 months; buy now and gain up to 30%