Stock to buy: Brokerages bullish on Bharti Airtel despite Q3 loss

Global brokerages maintained their bullish view on Bharti Airtel despite the telecom major on Tuesday posting a consolidated net loss of Rs 1,035 crore in December quarter against a net profit of Rs 86 crore in the same period of the last fiscal.However, the company also hinted at a further hike in tariffs with CEO Gopal Vittal stating tariffs must go up further to enable the industry to invest in emerging technologies.UBS retained ‘Buy’ on Bharti Airtel with a revised price target of Rs 615 (Rs 415 earlier). “We maintain a preference for Bharti Airtel amidst a sector turnaround. The telecom player should stand to gain as Vodafone Idea potentially is unable to sustain. Scenario analysis also gives comfort in upside despite the recent rally,” the brokerage house said.The scrip traded 0.57 per cent higher at Rs 522 in morning trade, while the benchmark BSE Sensex was up 185 points, or 0.45 per cent, at 40,974 at around the same time.Morgan Stanley is ‘Overweight’ on Airtel with a price target of Rs 530. “Indian wireless business revenue was better than expectations as ARPU surprised positively. Homes and enterprise business Ebitda was also better than the estimate,” it said.Consolidated revenue increased 10.50 per cent YoY to Rs 21,947 crore. The consolidated EBITDA margin grew 11.4 per cent to 42.6 per cent in the quarter as compared to 31.2 per cent in the corresponding quarter last year. Consolidated EBIT increased by 195.2 per cent YoY to Rs 2,401 crore.India revenues for Q3, at Rs 15,797 crore, have increased by 9.7 per cent YoY. Mobile revenues have witnessed a YoY growth of 9.6 per cent led by a strong focus on quality customers, up-trading, and in some part benefitted by the recent tariff actions; although the full impact of the tariff actions is yet to be seen. Consequently, ARPU has improved from Rs 128 to 135 QoQ.

from Economic Times https://ift.tt/392HJdg