Airtel’s stock at record high, invest now, you can get 25% return

Airtel Stock Outlook:Shares of telecom sector giant Bharti Airtel remain the top gainer of Sensex 30 today. The share strengthened by about 3.5 percent in the trade and reached the price of Rs 1356 (Airtel Stock Price), which is a record high for it. On Wednesday it closed at Rs 1310. After the quarterly results, the stock remains bullish, while brokerage houses are also looking positive.

Stock has increased 70 percent in 1 year

Airtel’s past performance has been strong. In the last one year, the stock has increased by almost 70 percent. This year also it has become stronger by 32 percent. If we talk about the last 5 years, it has given 315 percent return to the investors.

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You can get 25% return

Brokerage house Motilal Oswal has advised to invest in Airtel shares (Buy Airtel) and has given a target of Rs 1640. This is about 25 percent more than yesterday’s closing price of Rs 319. The brokerage says that Bharti Airtel’s revenue and EBITDA growth has been 3% and 2% on quarterly basis, which is as per estimates. India business has strengthened. Whereas subscriber and ARPU growth has been 2 percent and 0.5 percent on quarterly basis. African business has been affected due to currency devaluation. Capex has increased on a quarterly basis.

The brokerage house says that Airtel will benefit from consolidation in the sector in the next 2 to 3 years and will be in a strong position for tariff hike. The company has the potential for 40-50% growth in EBITDA in the next 2 to 3 years. During this period the company can halve its net debt. Management has indicated further reduction in capex. Tariff hike and further potential capex reduction are positive for the company.

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Global Brokerage Opinion

Brokerage house Jefferies has also advised buying in the stock and increased the target price to Rs 1590, which was earlier Rs 1300. Jefferies notes strong subscriber growth, improved mix and higher mobile ARPU in Q4, which led to a positive surprise in free cash flow (FCF) due to reduced capital expenditure. It adjusts its revenue and EBITDA estimates upward by 5 percent to take into account higher subscriber additions.

Over FY25-FY26, the brokerage estimates 15-16% CAGR in revenues and EBITDA of the India business, supported by reducing capital expenditure as well as deleveraging of $600 crore by FY25-26, leading to Stock returns are expected to get a boost.

Whereas Morgan Stanley has maintained ‘overweight’ call with a target price of Rs 1330. Whereas UBS has maintained ‘Neutral’ rating with a target price of Rs 1310 per share.

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How were the company’s results?

Bharti Airtel’s profit has declined by 31 percent on annual basis to Rs 2072 crore. In the same quarter a year ago, the company had earned a profit of Rs 3005.6 crore. The company’s operating revenue increased by 4.4 percent to Rs 37,599.1 crore, compared to Rs 36,009 crore in the same quarter a year ago. In the March quarter, the company added 78 lakh subscribers and managed to achieve an average revenue per subscriber (ARPU) of Rs 209.