Bharti Airtel shares have the potential to rise over ₹280 more, says brokerage firm Antique which has initiated coverage on the telecom company with a ‘buy’ rating and a target price of ₹1,505. The target price implies an upside of more than 23% in the stock price from the April 9 close.
Bharti Airtel shares trade almost 1.5% higher at ₹1,219.50 on BSE at 10:20 am on April 10. In the past year, the stock has made investors richer by 58% as against the benchmark Sensex’s 25% rise during the same period.
Antique believes the telecom company is set to ride its best financial performance phase in over a decade driven by tariff hikes, 2G upgradation and strong growth of the enterprise. The brokerage expects return ratios to top 20%.
In fact, following the October to December 2023 results, Morgan Stanley pointed out that Airtel’s higher-than-expected capex led to lower free cash flow (FCF) and that higher finance lease obligations resulted in higher net debt versus expectations.
As per its latest note, Antique expects the telco to witness historic high free cash flows that will drive balance sheet deleveraging.
The brokerage also pointed to certain challenges like Bharti Airtel choosing a different 5G rollout path versus key competitors. However, it believes it is unlikely to dent the firm’s subscriber base or growth significantly.
The data released by the Telecom Regulatory Authority of India (TRAI) earlier this week shows that the Sunil Mittal-led firm upped its wireless subscriber count by 7.78 lakh, taking its mobile tally to 15.30 lakh in February.
