Bharti Airtel’s stock saw an incredible rise on May 16, 2024, making it the Nifty index’s top gainer. A number of variables, such as the company’s stated pricing increases, improved Average Revenue Per User (ARPU), and the growth of its 5G network, contributed to this spike in share price. Brokerages have maintained their optimistic outlook on the company despite a notable fall in consolidated net profit for the March quarter; several have even raised their target prices. Let’s examine the information these brokerages have supplied on Bharti Airtel’s performance and potential moving forward.
The financial performance of Bharti Airtel
Despite a 31.1 percent decline in consolidated net profit for the March quarter, Bharti Airtel’s Q4 revenue is a noteworthy 4.4 percent higher than the previous year at ₹37,599 crore. The net profit range of ₹2,201 crore to ₹5,309 crore of the corporation highlights its ability to persevere in the face of difficulties. In keeping with its commitment to improving infrastructure, Bharti Airtel also announced a jump in capital expenditure (capex) for the quarter, totaling ₹10,500 crore. In spite of these obstacles, the telecom behemoth maintains an industry-best ARPU of ₹209, underscoring its strong operational performance.
Brokers’ Positive Outlook
Nuvama Institutional Equities has maintained its buy call on Bharti Airtel and increased its price objective to ₹1,600 from ₹1,580. Another well-known brokerage company, Motilal Oswal, has increased the target price of Bharti Airtel to ₹1,640 per share based on its projection of a 25% upside potential. Nomura raised the target pricing to ₹1,550 in its evaluation, highlighting the higher quality of Bharti Airtel’s customer base in comparison to its competitors. In the rapidly changing 5G scenario, Nomura also sees the company making a successful transition from a traditional telecom operator to a technologically advanced organisation.
Important Growth Factors
Several significant growth drivers are responsible for the recent spike in the price of Bharti Airtel’s stock. First off, the company’s revenue sources have been strengthened by the reported tariff hikes, which has strengthened its financial resiliency. Second, the steady increase in ARPU demonstrates Bharti Airtel’s capacity to get more out of its customer base. Furthermore, the company’s continued rollout of its 5G network highlights its dedication to innovation and technological progress in the telecom industry. These elements, along with lowering capital expenditure levels and strong operating cash flows, put Bharti Airtel in a strong position for long-term success and growth.
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