Bharti Airtel Surges To 10-Year High After Upbeat Earnings

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.

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.

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.

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.

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