Analysts bullish on Airtel, see investor returns of up to 27%

Shares of Bharti Airtel advanced as much as 1.3% in Thursday’s trading before closing the day at ₹800 on the NSE, up 0.98% from the previous close with a spike in trading volumes. More than 10 million shares exchanged hands on both exchanges, up nearly 2.3 times its combined average daily volume.

After market hours on Tuesday, India’s second-largest mobile operator reported a consolidated 50% year-on-year growth in fourth-quarter net profit that beat Street expectations, albeit with a softer India growth owing to aggressive capex.

“Continued strong traction in 4G/postpaid subscriber base and visibility of resilient incremental margins in India Wireless business and OCF generation augur well for Bharti,” said Morgan Stanley in a client note.

Of the 23 analysts who reviewed Airtel’s fourth-quarter earnings, 19 have a ‘buy’ or ‘outperform’ rating on the stock, three remain neutral and one has an ‘underweight’ rating on the stock, showed a Bloomberg poll of analysts.

The consensus price target decreased by 0.34% to ₹904.46 per share, Bloomberg data showed.

“We lower our FY24/25E India Mobile revenue by 4%/3% and Ebitda by 3%/2% amid a delay in hiking tariffs,” said BNP Paribas in a client note. “We also build in higher interest and amortisation costs on elevated capex, resulting in sharper EPS estimate cuts. However, we expect Airtel to report 30%+ earnings CAGR over FY23-25,” the BNP Paribas note added.