Bharti Airtel Share Rises as Morgan Stanley Stays Overweight, Assumes 11% Upside

Shares of Bharti Airtel moved higher in the opening session on March 14 after Morgan Stanley maintained its 'overweight' call.

Shares of Bharti Airtel rose in the opening session on March 14 after Morgan Stanley maintained an “overweight” stance on the stock.

The global research firm expects telecom stocks to hit a target of Rs 860 per share, representing an 11% upside from the current market price.

Bharti Airtel quoted Rs 772.40 on the BSE at 9:48 am, up Rs 6.65, or 0.87%. It touched an intraday high of Rs 776.25 and an intraday low of Rs 764.90. The stock’s volume was 317,836 shares compared with its five-day average of 84,613 shares, an increase of 275.64%.

According to Morgan Stanley, the telecom service provider has rolled out higher minimum recharge plans in the remaining three circles and was the first to raise entry-level tariffs.

The research firm expects the tariff hike to boost the company’s India mobile revenue by 1.3-1.5%. At the same time, it added that potential 4G tariff hikes and accelerated market share gains were key triggers.

The country’s second-largest telco reported a 91% surge in consolidated net profit to Rs 1,588 crore in the quarter ending December 2022, from Rs 830 crore a year ago. The surge was driven by improvements achieved during the year and strong 4G customer additions.

CLSA had earlier maintained its ‘buy’ call on Bharti Airtel shares and forecast a price of Rs 1,015 per share. The research firm believes the recent tariff hikes 14 months before the election could boost average revenue per user (ARPU) by 3%. Chief executive Bharti Airtel recently said that further tariff hikes are likely by mid-2023. In addition, acceleration in postpaid subscriber growth is expected to boost ARPU further. The research firm said Bharti Airtel is also on track to roll out 5G nationwide by March 2024.

CLSA forecasts the company’s consolidated/India mobile business EBITDA to grow at an average annual rate of 15-23% by FY25.

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