Shares of Bharti Airtel gained 4% in trade Tuesday (February 6) after the telecom major reported healthy earnings during the October to December quarter despite challenges from forex losses. At 9:33 am, the scrip was trading 2.82% higher at ₹1,145 apiece on the NSE. The stock has rallied 13% so far this year and it's up 45% in the last one year.
Global brokerage house Morgan Stanley has equal weight rating on the Bharti Airtel stock with a target price of ₹1,015 per share. The broking firm sees an improvement in the company's revenue from the India mobile business and EBITDA on the back of better subscriber mix as the key highlights of its Q3 earnings.
Bharti Airtel's capex was stable quarter-on-quarter and surprised positively. The telco also saw a robust cash flow generation, highlighted Morgan Stanley in its research report.
Bernstein has an 'Outperform' rating on the counter with a target of ₹1,140 per share. The brokerage said that strong India ARPU (average revenue per user) with capex continue to moderate ARPU beat at ₹208, over 2.5% quarter-on-quarter and 7.8% year-on-year, driven by higher post paid adds and smartphone or data upgrades.
India wireless revenue grew 3.3% sequentially led by 2.5% ARPU growth and 1% growth in sub.
The telco reported a 54% jump in its net profit at ₹2,442 crore for the third quarter that ended on December 2023. The profit figure was much lower than CNBC-TV18's poll of ₹3,200 crore.
Revenue from operations in the reporting quarter increased 6% to ₹37,899.5 crore, partially impacted by currency devaluations in Africa.
ARPU improved to ₹208 in the third quarter as against ₹193 in the corresponding quarter of the previous year.
"We have delivered yet another quarter of consistent and competitive growth across all our businesses. Revenue from India business sustained its momentum and grew sequentially by 3.0%, while the consolidated revenue was impacted by the devaluation of the Nigerian Naira and Malawian Kwacha," said MD Gopal Vittal.
Vittal said the quarter witnessed a strong growth trajectory for the postpaid and Homes business, while our DTH business added 388k net adds – the highest in the last 12 quarters. "We remain on course with our strategy of premiumisation that helped us add 7.4 million 4G/5G customers and exit the quarter with an industry leading ARPU of ₹208. Even at this ARPU, our return on capital employed however, continues to be low at 9.4%. To ensure industry health, tariff repair is extremely critical.”
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