Bharti Airtel shares jumped 5 per cent on February 7 following the company’s stellar performance in the December quarter.
The telecom operator’s net profit rose 505 per cent to Rs 14,781 crore in the third quarter, driven by a one-time exceptional gain on account of consolidation of majority stake in Indus Towers.
The telecom company booked a one-time gain of Rs 7,546 crore during the reporting quarter, helping it surpass the Street’s estimated net profit of Rs 5,039 crore.
Meanwhile, revenue in the quarter also grew 19 per cent year-on-year to Rs 45,129 crore, well above the expected Rs 43,874 crore.
Not just that, the company’s average revenue per user (ARPU), a key metric for telecom operators, also rose to Rs 245 in Q3 against Rs 208 in the same quarter last fiscal.
At 10.46 am, Bharti Airtel shares were trading at Rs 1,697.40 on the NSE, marginally down from its day’s high of Rs 1,707.55. Also, with the gains in today’s session, the stock has come a long way from its all-time high of Rs 1,779. Meanwhile, the rally in the stock was accompanied by heavy trading volumes.
So far, 80 lakh shares of the company have changed hands on the exchanges, which is already higher than the one-month average of 49 lakh shares traded daily.
Morgan Stanley maintained an ‘equal weight’ call with a target of Rs 1,650, the brokerage noted that Bharti Airtel’s net debt reduced by nearly $1 billion QoQ, reflecting the company’s strong free cash flow (FCF) generation.
HSBC also reiterated its ‘buy’ call with a target price of Rs 1,940 per share, citing intact growth levers such as rising mobile ARPU, expanding home broadband subscribers, increasing FCF and dividend hikes.
Similarly, CLSA retained its ‘outperform’ rating on the stock with a target price of Rs 1,860, highlighting the company’s strong consolidated FCF after lease and capex.
