Shares of Bharti Airtel Ltd. jumped to the record high after CLSA hiked its target price as it expects the company’s growth is set to shift gears riding the overall mobile growth in India. The telecom-giant is at the forefront of mobile growth in India because of its robust management and reduced risk of competition from Reliance Jio, according to the report.
The brokerage has a ‘buy’ call on the stock with a target price of Rs 1,540 apiece, implying an upside of 8.5% from Friday’s closing price. The target price is revised upward from Rs 1,370.
Bharti Airtel’s strong management will continue to steer its growth and generate good returns, CLSA said. The average revenue per user, or ARPU, of Bharti Airtel is at a 15% premium to sector leader Reliance Jio, reflecting the company’s management strength.
The telecom giant’s user base in India has risen to 56.2 crore across 16 countries, of which 40.6 crore are in India. The stock’s return is most sensitive to its average revenue per user, CLSA said.
The brokerage has forecasted an ARPU of Rs 286 for fiscal 2027 compared to the chief executive officers’ target of Rs 300, which leaves room for positive surprise, according to CLSA.
CLSA estimates the return on capital employed to jump 9% to 21% by fiscal 2027, which will rank it as one of the best users of capital among telecom companies globally.