Bharti Airtel's Q3FY23 performance has resulted in a BUY call from two Brokers, Jefferies and CLSA. While Jefferies has upgraded Airtel to BUY, CLSA has reiterated a BUY call on Bharti Airtel. Coupled with disruptive practices and competition, the last few years were challenging for any Telco in India. However, the one telco that withstood all the bad weather is none other than Bharti Airtel.
Also Read: Airtel Launches 5G in 125 Cities at Once: Details
Bharti Airtel has the highest VLR percentage today than any other Indian telco. Moreover, with a 6.02 Million Active Wireless Subscriber base addition in December, Airtel stands the highest in Active subscriber additions among the telcos.
Why Jefferies Upgraded Airtel to BUY Call
Jefferies believes that Bharti's market share gains among 4G subscribers, tariff hikes which Airtel is strategically implementing, should help Bharti Airtel drive 13% of mobile ARPUs over FY23-25. Also, Airtel is aggressively rolling out its 5G Network based on its data science, where the telco sees demand for 5G and smartphone growth. According to Jefferies, 5G rollouts of Airtel will accelerate market share gains. As a result, Jefferies says Airtel stock offers a 16% upside potential and has upgraded Bharti to BUY.
Also Read: How Tariff Hikes Can Help Improve the Telecom Industry
Duopoly: Jefferies also highlighted the state of Vodafone Idea. Even if Vi was able to secure funding, the broker believes that it is unlikely that Vi matches the Capex plans of Airtel. Furthermore, Jefferies believes VIL will likely witness accelerated market share losses as 5G deployments of Airtel progress, and 5G becomes a mainstream Network, of which the initial signs are already visible.
Also Read: Bharti Airtel 15 Lakh Subscriber Addition in December, Highest in 9 Months
Why CLSA has a BUY Call for Airtel
CLSA believes that Bharti Airtel has been leading Telecom sector tariff hikes, and the latest Tariff increase comes 14 months before India's general elections. Airtel's recent tariff hike in the entry-level plans in 19 of 22 circles can boost ARPU by 3%. Speaking at the MWC23, Barcelona, Sunil Mittal said he expects more hikes by mid-2023, which is also positive news for the struggling Industry. In addition, CLSA noted the telco's postpaid subscriber gains, which will boost ARPU; the gains are likely to continue with 5G Services. Bharti Airtel is on track for a nationwide 5G rollout by March 2024 and has reiterated its BUY call with a Rs 1,015 SOTP target price.
CLSA noted that Airtel is leading India mobile tariff hikes, postpaid subscriber gains, increased ARPU, and lack of Vodafone Idea 5G as all the positives around Bharti Airtel. Bharti Airtel reported an ARPU of Rs 193 for Q3FY23 and the data consumption per customer stood at 20.3 GB per month.
Also Read: Airtel Says 10 Million Unique Users Latched on to its 5G Network
You can check out the exact Airtel 5G Plus launch details, circles, spectrum holdings and locations of 5G availability in India on the page here.
