Bharti Airtel stock breaches ₹1,000 mark first time, m-cap nears ₹6L crore

The stock has exhibited consistent growth in recent years, showcasing its robust performance. Notably, in CY19, it delivered an impressive return of 59%. The positive momentum continued in subsequent years, with gains of 11.83% in CY20, 37% in CY21, and 18% in CY22.

In the current year, Bharti Airtel has sustained its upward trajectory, recording a return of 23.56%, outperforming the benchmark Nifty 50, which registered a 10.62% gain during the same period.

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Surging to a historic high, Bharti Airtel’s stock has propelled the company’s market capitalization close to the ₹6,00,000 crore mark. At its peak price of ₹1,007, the company’s market cap reached an impressive ₹5,71,291 crore.

According to the BSE data, there are only nine Indian publicly listed firms with a market capitalization of over ₹5,00,000 crore, and among these, Bharti Airtel secures seventh position.

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In the quarter ending September 2023 (Q2 FY24), the company posted a net profit of ₹1,341 crore, marking a 37% decrease compared to the ₹2,145.2 crore reported in the same period last year.

The substantial, exceptional loss of Rs. 1,570 crore was attributed to heightened tax liabilities resulting from the Apex Court’s reclassification of licensing fees as capital expenditure, coupled with other litigation liabilities have impacted the company’s bottom line profit.

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However, after adjusting for non-recurring items, the profit after tax (PAT) demonstrated robust growth, registering an increase of 44.2% YoY during the quarter. Its revenue for the September 2023 quarter stood at ₹34,527 crore, reflecting a 7% growth compared to ₹37,044 crore in the corresponding period last year.

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Airtel’s average revenue per user (ARPU) improved to ₹203 during the quarter as against ₹190 in the corresponding period of the previous fiscal.

Bullish Outlook

Following the company’s Q2FY24 performance, domestic brokerage firms kept their bullish stance on the stock. Geojit Financial Services has upgraded its rating on the stock to ‘buy’ and revised the target price to ₹1,042 per share.

The brokerage highlighted Airtel’s credible 4G/5G rollout plans, strategic capex allocations, and a well-defined structure. Geojit believes these factors position the company to maintain its leadership in India and deliver robust performance in the future.

Similarly, Axis Securities has also retained its ‘buy’ recommendation on the stock, citing the company’s strong recovery potential driven by efficient conversion, an expanding digital portfolio, and moderated capital expenditure. 

The brokerage has a target price of ₹1,155 apiece. The brokerage anticipates Bharti Airtel to continue gaining market share, leveraging its high penetration levels, and minimizing capital expenditure. Positive about Airtel’s future growth with an enhanced digital portfolio and increasing per-user data, the brokerage maintains an optimistic outlook.

Meanwhile, Motilal Oswal and ICICI Securities have both retained a ‘buy’ call on the stock, maintaining target prices of ₹1,070 each.

At 12:15 PM, the stock was trading with a gain of 0.97% at ₹994.45 apiece.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Updated: 29 Nov 2023, 12:12 PM IST