[wealthdesk shortname="Bharti Airtel" isinid="INE397D01024" bseid="532454" nseid="BHARTIARTL" sector="Telecommunications - Service" exchange="nse"]

Bharti Airtel shares rose on Wednesday after the telecom major reported a quarterly performance that largely met Street expectations. Investors gave a thumbs up to the company's average revenue per user (ARPU) — a key measure of profitability for telecom companies — but analysts warn that a further increase will require tariff hikes.

The Bharti Airtel stock gained by as much as Rs 14.7 or 2.1 percent to Rs 719 apiece on BSE.

Bharti Airtel's ARPU increased 2.8 percent to Rs 183 compared with the March quarter.

<img class="aligncenter size-full wp-image-14428152" src="https://images.cnbctv18.com/wp-content/uploads/2022/08/Aug-10-ARPU-.jpeg" alt="" width="718" height="407" />

It had stood at Rs 146 in the quarter ended June 2021. Motilal Oswal said the company's ARPU powered its growth in the India mobile business.

<img class="aligncenter size-full wp-image-14428292" src="https://images.cnbctv18.com/wp-content/uploads/2022/08/Aug-10-ARPU-increase.jpeg" alt="" width="795" height="349" />

The New Delhi-based telecom operator's revenue growth was led by its Africa business, though its net profit missed analysts' estimates on account of a higher finance cost on lease-related liability and a higher forex loss.

Its quarterly revenue increased 4.1 percent sequentially to Rs 32,804 crore, better than what analysts in a CNBC-TV18 poll predicted - Rs 32,620 crore.

Airtel's margin slipped by 60 bps on quarter to 50.4 percent, as against the analysts' estimate of 50.3 percent.

Bharti Airtel's net profit slumped 20 percent to Rs 1,607 crore for the April-June period compared with the previous three months, according to a regulatory filing.

<img class="aligncenter size-full wp-image-14428162" src="https://images.cnbctv18.com/wp-content/uploads/2022/08/Aug-10-airtel.jpg" alt="" width="917" height="464" />

Bharti Airtel's EBITDA margin — a metric that indicates a business's operating performance — improved by 60 basis points to 51.2 percent, ahead of the estimate of 50.6 percent by the analysts.

Jefferies brought down its profit estimates for the company by 4-12 percent to factor in its performance in the April-June period.

The brokerage's target price for the Airtel stock implies a 24 percent upside from Monday's closing price.

<img class="aligncenter size-full wp-image-14427822" src="https://images.cnbctv18.com/wp-content/uploads/2022/08/Aug-10-bharti-airtel.jpg" alt="" width="1280" height="720" />

Motilal Oswal pointed out that despite Bharti Airtel's robust data traffic volumes, its data traffic/subscriber was more than 50 percent below Reliance Jio's, highlighting healthy network capacity and room for improvement.

The brokerage has a 'buy' rating on the Airtel stock with a target price of Rs 910.

The stock is trading at eight times its consolidated embedded value-to-EBITDA ratio for the year ending March 2023 with the India business at slightly below 10 times, according to Motilal Oswal.

The Bharti Airtel stock has rewarded investors with a return of 7.5 percent in the past one month, a period in which the Nifty50 has risen eight percent.

<img class="aligncenter size-full wp-image-14428092" src="https://images.cnbctv18.com/wp-content/uploads/2022/08/Aug-10-bharti-airtel-shares1.jpg" alt="" width="1080" height="596" />

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Bharti Airtel woos Street with revenue per user but road ahead may need more tariff hikes

By CNBCTV18.com Aug 10, 2022 12:08:29 PM IST (Published)

Bharti Airtel results: Bharti Airtel shares rose on Wednesday as the telecom operator's quarterly performance largely met Street expectations. Analysts said its average revenue per user (ARPU) drove revenue growth but further improvement will need more of tariff hikes.

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