Religare Retail Research has recommended a BUY on Bharti Airtel with a Target Price of Rs. 1010, an upside of 13.5% from CMP of Rs. 890, in its research report on 7th August 2023.
Healthy revenue growth
Bharti Airtel’s revenue from operations was in line with our expectations at Rs 37,440 Cr, up by 14.1% YoY/4% QoQ driven by a healthy addition of ~10 Mn customers in overall business mainly in the India and South Asian markets. Amongst segments, its Mobiles services India reported a growth of 11.9% YoY/4.3% QoQ to Rs 20,392 Cr, followed by Mobile services Africa which was up by 16.6% YoY/2.6% QoQ to Rs 11,317 Cr while other segments too reported healthy growth..
The 5G penetration in the Indian markets is still at a nascent stage due to slower transition of customers from their current smartphones to 5G enabled smartphones. As per the company, of the overall smartphones shipment 48% account for 5G smartphones indicating that there is still ample time for the industry to witness full 5G transition and up-gradation. Consequently, it is in the process to complete its 5G rollouts by the end of FY24.
Strong opportunity on Postpaid
As of now its postpaid user base stands at ~6% of its total subscriber base. Management believes there remains a huge opportunity in the postpaid space as they attract higher ARPUs as compared to prepaid ARPUs. Its nuclear family plans have been very well accepted by customers resulting in 1.8x ARPUs against the prepaid ARPUs. Going ahead, it will be aiming at increasing the participation of postpaid customers and implementing new and better nuclear plans which would eventually aid in ARPUs expansion.
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