Shares of Bharti Airtel surged nearly 2% to ₹724 apiece on the BSE in Wednesday's opening deals, a day after announcing its second quarter earnings. The telecom giant reported a net profit of ₹1,134 crore for the September 2021 quarter, and said it is witnessing strong business momentum with growth in 4G customers and increase in mobile ARPU.
The Q2 profit comes against a loss (attributable to owners of the parent) of 763.2 crore during the year-ago quarter. On a sequential basis, the telco witnessed an increase of 300% in its profit after tax from ₹283 crore in the quarter ended June 2021.
Bharti's Q2 revenues/Ebitda were in line while profit beat estimates due to gain on sale of spectrum to Jio, as per Jefferies. “While mobile Arpus missed estimate, lower than expected churn offset this. Bharti's subscriber mix improved further- a reflection of its network investments. Homes and enterprise segments also surprised positively," the brokerage said.
Bharti Airtel remains Jefferies' top stock pick given strong growth with maintaining its Buy rating on the telecom stock with revised target price of ₹860 per share (from ₹850).
Airtel's average revenue per user (ARPU) improved to ₹153 in second quarter as against ₹143 in the previous year period. The company said it continues to gain a strong share of the 4G customers in the market.
CLSA has also retained its Buy rating on Bharti Airtel shares. It said that Bharti's second quarter beat adds upside to its revenue/Ebitda forecasts but minorities and tax downside risk to profit.
“Led by Bharti's 4G penetration of 60% of its own India mobile subscribers along with ARPU growth, we forecast a 15% consolidated Ebitda CAGR by FY24," CLSA said in a note. It has a target price of ₹860 on the telco stock.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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Bharti Airtel shares surge today. What brokerages say on Q2 results? - Mint
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