Shares of Bharti Airtel rose 4.9 percent to Rs 522 today, the highest since December 2007, after it delivered a stable set of a quarterly earnings on easing in the pricing pressures. Most brokerages maintained their outlook on the Sunil Mittal-led telecom operator and reiterated it as the best play on consolidation in the sector.
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For a complete report on Airtel’s earnings, click right here
Here’s what brokerages had to say about Bharti Airtel post Q2 earnings.
UBS
- Stock Rating: Maintianed ‘Buy’
- Target Price: Unchanged at Rs 495, implying a potential upside of 18.2 percent from Tuesday’s close.
- We believe quarter-on-quarter improvement in margins is a meaningful positive surprise.
- Solid results in a tough quarter, Africa margins surprise positively.
- India mobile revenues down, but the key performance indicators show strong defence against Reliance Jio.
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CLSA
- Stock Rating: Upgraded to ‘Buy’ from ‘Underperform’.
- Target Price: Hiked to Rs 637 from Rs 430, implying a potential upside of 27.9 percent from yesterday’s close.
- Bharti Airtel, with its execution/spectrum edge, should remain the industry leader and is the best play on consolidation.
- Consolidation and data have revived long-term growth, i.e., beyond the current financial year.
- Cut consolidated forecasts by 2-30 percent, with India average revenue per user risks and unsustainable lower selling, general and administrative expenses and network costs.
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Credit Suisse
- Stock Rating: Maintained ‘Neutral’.
- Target Price: Hiked to Rs 430 from Rs 400, implying a potential downside of 13.5 percent from yesterday’s close.
- Being able to maintain margins in India mobile in a seasonally weak quarter with 5 percent revenue decline is commendable.
- We would look to understand the sustainability of these cost cutting measures on the call.
- The trends in Africa are puzzling – with company appearing to completely cut down on capex, network sites being shut down and employee count falling.
- Raise earnings per share estimates by 5-6 percent for the current and next financial year, to factor in better Africa margins.
Morgan Stanley
- Stock Rating: Maintained ‘Overweight’
- Target Price: Unchanged at Rs 560, implying a potential upside of 12.6 percent from yesterday’s close.
- Overall revenue in line with our estimate, Ebitda beat estimates by 5 percent.
- Indian wireless margins were sustained despite seasonally weak quarter.
- Volume growth in both voice and data remained robust.
- Momentum continues in Africa.
- Airtel Business and DTH showed sequential improvement, but home services performance was subdued.