Bharti Airtel after tariff hike is a good bet; here’s why brokerages say so

The global brokerages are bullish on Bharti Airtel after it raised the tariff on data and calls. The telco’s financials are expected to improve post-hike in rates, both Morgan Stanley and CLSA said. Sunil Mittal-backed telecom operator is expected to see an improvement in profitability and balance sheet in the coming years and also see an increase in APRU, brokerages said. Bharti Airtel was upgraded by Morgan Stanley to overweight, with the target price raised to Rs 530 from Rs 410 per share earlier. Similarly, CLSA maintained a buy rating and raised the target price to Rs 560 from Rs 515 earlier. The brokerage is of the view that the telco’s aggressive network rollouts may push up the market-share forecast of 30 percent by FY22.

Bharti Airtel and Vodafone Idea on Sunday announced fresh plans to raise tariffs from Tuesday onwards, following which the mobile calls and internet charges will go up by up to 50 per cent. Reliance Jio ‘s revised tariffs will be launched on December 6. It will lead to the voice and data tariff increasing by up to 40 per cent.

Meanwhile, after hitting a 52-week high in the previous session, shares of Bharti Airtel on Tuesday fell over 1 per cent after Moody’s said AGR dues are credit negative for the telecom operator. Adjusted gross revenue dues on Bharti Airtel are credit negative for the telecom operator despite a two-year moratorium given by the government on spectrum payment and the telecom operator plan to raise mobile call and data charges, the global credit rating agency Moody’s Investors Service said on Monday in a note.

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