Bharti Airtel unveils growth opportunities; analysts maintain positive outlook

Most analysts reiterated their ‘buy’ rating on Bharti Airtel Ltd. after the carrier unveiled growth opportunities across mobile and digital segments.

The telecom operator sees its 5G readiness and segments such as broadband, homes, and enterprise (business-to-business, data centres) to be the key growth drivers, according to its ‘Investor and Analyst Day 2022’ presentation released on the bourses on Friday.

Also, “monetisation opportunities” across assets such as Indus Towers Ltd., Nxtra, and other fibre assets will help lighten the balance sheet, it said.

Shares of Bharti Airtel rose 1.64%, the most in four sessions, as of 1:00 pm on Monday. Of the 33 analysts tracking the company, 30 maintain a ‘buy’, two suggest a ‘hold’ and one recommends a ‘sell’, according to Bloomberg data. The 12-month consensus price target implies an upside of 21.5%.

Here’s what analysts have to say about Bharti Airtel’s growth plans.

Motilal Oswal
Mobility business has multiple ARPU levers supported by a favourable market construct, tariff hikes, and a shift to smartphones from feature phones.

Homes business is in a land acquisition state, targeting 2.5 times growth in the home passes over FY22-25E.

Premiumisation of services like the Airtel Black campaign, OTT + linear will drive ARPUs and increase customer wallet share.

Digital assets (Thanks/Wynk, Payments Bank) have helped the company to create multiple value unlocking opportunities.

5G preparedness is demonstrated through 5G trials, backhaul fiberisation, and infra readiness, and device ecosystem developments.

Expects a 15% ARPU increase over FY22-24E through market share gains, tariff hikes and customer upgrades, and growth in the non-mobility business.

Maintains ‘buy’ with a target price of Rs 910 apiece, implying a 28% potential upside.

DART
Reframed its B2B strategy to increase the customer wallet share and add new customers at a faster pace.

New-age businesses like Airtel IQ, ad-tech, payments bank have become profitable with each of them reaching an annual revenue run-rate of Rs 1,000 crore.

The stake increase in Indus Towers should bring stability in shareholding and boost confidence.

Immense scope and focus on increasing the postpaid subscriber base. The management remains confident that the ongoing inflationary scenario will not delay the planned tariff hike in 2022.

5G device penetration is expected to rise to 10-12% by the end of FY23 and 23-25% by the end of FY24 from 4% currently.

Home broadband growth will be driven by industry tailwinds and market share gains. New/emerging services will drive the enterprise segment business growth.

Maintains ‘buy’ with a target price of Rs 840 apiece, implying a potential upside of 18.4%. BloombergQuint