'Buy' This Telecom Stock For 16% Upside, ICICI Direct Recommends

Target Price

The Current Market Price (CMP) of Bharti Airtel is Rs. 742. The brokerage firm, ICICI Direct has estimated a Target Price for the stock at Rs. 860. Hence the stock is expected to give a 16% return, in a Target Period of 1 year.

Company performance

Assuming conservative pass-through of ~75% to EBITDA, the wireless EBITDA will rise by ~29% from current levels. Additionally, Bharti Airtel (Airtel) announced a tariff hike in its prepaid segment with ~20% tariff hike across the board, ~25% hike in base entry-level 2G tariff with effect from November 26, 2021. Market Capitalisation of the company is Rs. 4,07,561 crore.

 

Comments by ICICI Direct

Maintaining a Buy rating, ICICI Direct said, "With prepaid subscriber and revenues forming ~95%, ~87-88% of overall subscribers, revenues, respectively, the tariff hike will result in wireless revenues increasing by ~19%. We highlight that we had built in ~15% step-up tariff over Q4FY22 and FY23. Thus, tariff increase implies accelerated (and bit higher) benefits with 5%, 6% upgrade in our FY22, FY23 India EBITDA estimates and ~3.6%, 4.5% upgrade in overall EBITDA estimate in FY22, FY23, respectively."

About the company

Bharti Airtel Limited is a leading global telecommunications company with operations in 18 countries across Asia and Africa. Headquartered in New Delhi, India, the company ranks amongst the top 3 mobile service providers globally in terms of subscribers. In India, the company's product offerings include 2G, 3G, and 4G wireless services, mobile commerce, fixed line services, high-speed home broadband, DTH, enterprise services including national & international long-distance services to carriers.

Disclaimer

The above stock was picked from the brokerage report of ICICI Direct. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.