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CLSA expects 31% upside in Bharti Airtel stock price driven by rising tariffs

CLSA has maintained a buy call on Bharti Airtel’s stock and expects the price to reach Rs 1,015 per share, indicating an upside of more than 31% from the current market price.

The research firm believes that the recent tariff hikes, which came 14 months ahead of the general elections, can boost the average revenue per user (ARPU) by 3 percent.

Bharti Airtel’s CEO has also indicated that there may be further tariff hikes by mid-2023. Additionally, the acceleration in post-paid subscriber growth is expected to further boost ARPU. Bharti Airtel is also on track for nationwide 5G rollout by March 2024, the research firm said.

CLSA has forecasted a consolidated/India mobile earnings before interest, taxes, depreciation, and amortization (EBITDA) compound annual growth rate (CAGR) of 15/23 percent to FY25.

At 10:00 hrs Bharti Airtel was quoting at Rs 771.50, up Rs 5.05, or 0.66 percent on BSE. It has touched an intraday high of Rs 795.50 and an intraday low of Rs 770.40.

Sunil Bharti Mittal, Chairman of Bharti Airtel at the Mobile World Congress said he feels that the return on capital (RoC) in the business is very low and that people are likely to see a tariff hike mid-2023.

Mittal said that Airtel has a healthy balance sheet with no need to raise any more capital. “Lot of capital has been injected that has made the balance sheet strong, but the return on capital of this industry is very low. That needs to change. We are talking of small increments that need to come in the Indian tariff situation. I hope by mid of this year,” he added.

Bharti Airtel, recorded a 91 percent surge in consolidated net profit at Rs 1,588 crore for the quarter ended December 2022 from Rs 830 crore a year back, helped by improved realisation along with strong 4G customer additions during the year.

Total revenue stood at Rs 35,804 crore, up 20 percent from Rs 29,867 crore reported in the corresponding quarter last year. Revenue was up 4 percent sequentially, Bharti Airtel said in an exchange filing. Money Control

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