Bharti Airtel leads the pack on all parameters such as revenues, EBITDA, ARPU, data traffic as well as voice traffic. Vodafone Idea seems to be struggling for positioning while Reliance Jio has lost some steam
Bharti Airtel share price is just 3.5 per cent away from its 52-week high of Rs 611.70 apiece, touched in May this year. So far this year, the stock price has nearly doubled from Rs 322 apiece in August last year. Last week, the telecom major announced that US-based Carlyle Group will invest $235 million in its data centre business Nxtra Data Limited (Nxtra) for a 25 per cent stake. Bharti Airtel price gained 1.4 per cent in today’s trade to hit intraday high of Rs 589.40 apiece, taking the market capitalisation to Rs 3,16,013.16 crore. Most of the research and brokerage firms are upbeat on this index heavyweight telecom stock with an upside up to 20 per cent. Among the top three telecom firms, Bharti Airtel seems to be getting back to its competitive best, after being battered by Reliance Jio’s commercial entry. “On an incremental (4QFY20 over 2QFY20) basis, Bharti leads the pack on all parameters (except overall subs) such as revenues, EBITDA, ARPU, data traffic as well as voice traffic. VIL (Vodafone Idea) seems to be struggling for positioning while Reliance Jio has lost some steam,” said Kotak Institutional Equities in its latest research report.
After Reliance Jio, Bharti Airtel is also likely to bring its own video conferencing service, according to multiple news reports. With the increased usage of apps like Zoom, Google Meet, Microsoft Teams, among others, companies are betting on video conferencing apps as most of the people are working from home during the coronavirus-led lockdown. In another development, Nokia on Monday said its software products are powering Bharti Airtel’s Voice over LTE (VoLTE) network in India. As part of its ‘cloudification strategy’, Airtel will deploy Nokia’s CloudBand Infrastructure Software. Brokerage firm Emkay Global Financial Services has given a ‘buy’ rating to the stock with a target price of Rs 684, an upside of nearly 18 per cent. “Data volume will swell 12% qoq on account of increased usage during the lockdown, while minutes on the network is expected to stay flat qoq. Home broadband shall see increased traction driven by data demand. The Africa business is projected to record EBITDA growth after a sequential decline in the previous quarter, partially aided by lower opex and INR depreciation,” it said in the report.
Brokerage firm Anand Rathi Research believes that Bharti Airtel will benefit from $235 mn investment from Carlyle group, given Carlyle’s prior experience in data centre ownership through investments in Coresite in the US and Itconic in Spain. On the back of improved performance in Africa business, revenue market share gain and decent network capacity compared to peers, several capital-raising activities, Anand Rathi is positive on the stock with a ‘hold’ rating and price target of Rs 625 per share, an upside of 7.5 per cent.
Similarly, Geojit Financial Services has reiterated ‘buy’ rating on Bharti Airtel stock with a revised target of Rs 693 per share, a gain of nearly 20 per cent. “Rising ARPU and customer base should provide support to company valuations. Additionally, the increased demand for broadband connections amidst COVID-19 will further improve topline,” it said in the report.