Why this analyst is bullish on Bharti Airtel
Balaji Subramanian, Vice President at IIFL Securities predicts an increase in tariffs after elections potentially improving the Average Revenue Per User (ARPU).
Balaji Subramanian, Vice President at IIFL Securities, has given a 'Buy' recommendation on Bharti Airtel after the telecommunications service provider released its third quarter earnings on February 5. In an interaction with CNBC-TV18, Subramanian listed several reasons for his optimism on the company's future.
Subramanian predicts an increase in tariffs after elections potentially improving the Average Revenue Per User (ARPU).
Additionally, the company's rollout of 4G services in rural areas and plans for 5G deployment over the current (FY24) and next financial year (FY25) are expected to boost earnings.
Subramanian praised Bharti Airtel's recent quarter performance, noting a 2.5% quarter-on-quarter (QoQ) growth in ARPU, which stands at ₹208 per month for the quarter compared to ₹193 in the same quarter last year. This increase has been attributed to customers upgrading from 2G to 4G services and opting for higher data allowance packs.
Despite challenges such as a stiff competition and minimal tariff hikes, Bharti Airtel's numbers have exceeded expectations, said Subramanian.
Subramanian also shared his view on Vodafone Idea (Vi), While the company saw subscriber declines earlier, the situation has improved in the recent quarters, and the focus is now on improving ARPUs, he noted, adding there may be some limitations to growth due to financial constraints, hindering its ability to invest in network expansion.
Bharti's market capitalisation is currently at ₹6,54,286 crore, while that of Vodafone Idea is ₹68,346 crore.
(Edited by : Shweta Mungre)
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