![](https://i0.wp.com/markmeets.com/wp-content/uploads/2022/06/Forex-Trading-Platforms-Feature.jpg?resize=512%2C341&ssl=1)
According to the user base, Bharti Airtel is the second-largest telecom company in India. Globally, it has a presence in 17 countries. It claims to be one of the top three mobile operators globally, with its networks covering over two billion people. It is also the second-largest mobile operator in the African continent.Besides, the company has interests in payments banking, AdTech, data centres, cloud communications, direct-to-home TV, broadband, and digital marketplace.
The company is also the best-run telecom company in India, with industry-leading average revenue per user per month in the wireless business. ARPU is a metric used to determine the efficiency of a telecom company in generating revenue. As of October end, shares of the company have outperformed the benchmark Nifty so far in 2022. It has delivered 16% returns to shareholders, and trades around Rs. 800 per share, thanks to its rapid growth in ARPU.
However, with recent tariff hikes priced in, the main driver for share price appreciation is behind. Now, ARPU is likely to stagnate unless the company steps to raise tariffs. However, analysts remain upbeat about Bharti Airtel share for multiple reasons. In India, the business operates in a virtual duopoly where Reliance Jio and Airtel are two companies competing against each other, while Vodafone Idea has been consistently losing users.
Analysts at ICICIdirect also highlight that the favourable industry structure of three players (two being strong), government relief, tariff hike and fundraising puts Airtel in a sweet spot to maintain its relative strength among peers with a formidable digital ecosystem offering.According to them, key triggers for future price performance are:
- Tariff hike:Any further tariff hike and its pass through to consumers would bolster margins, along with ARPU. Its margins stand at 50%, which has come down slightly due to lower African margins.
- Market share gains: As stated earlier, Vodafone Idea is losing customers every month, converting into users as every new user means more revenue for Airtel.
- 5G: Having recently launched 5G services in many cities across India. Analysts believe this will provide further growth opportunitiesfor the company.
- Falling debt: Even though the company has substantial liabilities, the overall deficit is coming down thanks to moratorium relief from the government on statutory debts and consistent payout. It now stands at Rs. 1.19 lakh crore, down by Rs. 4,035 crorein June 2022.
ICICIdirect analysts have a ‘Buy’ rating on the share pricewith a target price of Rs. 860. This means they see around a 7-8% potential upside from hereon in the next 10 months. This implies that the stock price may not rise much in the last two months of 2022.
Disclaimer :ICICI Securities Ltd. (I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. is a Member of National Stock Exchange of India Ltd (Member Code :07730), BSE Ltd (Member Code :103) and Member of Multi Commodity Exchange of India Ltd. (Member Code: 56250) and having SEBI registration no. INZ000183631. I-Sec is a SEBI registered with SEBI as a Research Analyst vide registration no. INH000000990. Investments in securities markets are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The non-broking products / services like Research, etc. are not exchange traded products / services and all disputes with respect to such activities would not have access to Exchange investor redressal or Arbitration mechanism. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investors should consult their financial advisers whether the product is suitable for them before taking any decision. The contents herein mentioned are solely for informational and educational purpose.
Author Profile
-
Interviewer and Photographer
Charley is known for finding and finding new music talent and that is why she is a perfect for for our team.
Credited also in Daily Mail and The Mirror.
Email https://markmeets.com/contact-form/
Latest entries
TVFriday, 9 August 2024, 20:16The Walking Dead Cast Ranked From Richest To Poorest
MusicFriday, 2 August 2024, 18:24Top 10 songs that everybody knows
TVSaturday, 25 May 2024, 20:00Mr. Morris Lines from Friday Night Dinner: Hilarious Quotes by Harry Landis
Film PremieresMonday, 4 March 2024, 17:35Who secures London film premiere tickets
You must be logged in to post a comment.