The share price of Bharti Airtel dropped on Wednesday, a day after the telecom major's earnings for the June quarter showed its profit fell short of the Street expectations. The stock fell as much as 1.76 percent in morning deals to Rs 570 apiece on the BSE.
The telecom operator posted a consolidated net profit of Rs 283.5 crore for the first quarter of the current financial year, as against a net loss of Rs 15,933 crore for the corresponding period a year ago.
Analysts in a CNBC-TV18 poll had forecast a net profit of Rs 350 crore for the quarter ended June 30.
Bharti Airtel reported a 15.3 percent rise in total revenue at Rs 26,854 crore for the April-June period.
Airtel's average revenue per user (ARPU) -- a key metric for telecom firms -- came in at Rs 146 in the quarter ended June 2021, higher than Rs 138 in the year-ago period.
At 10 am, Airtel shares traded 1.41 percent lower at Rs 572 apiece on the BSE, underperforming the benchmark Sensex index, which was up 0.87 percent at 54,292.23. The stock also underperformed the S&P BSE Telecom sectoral gauge, which was down 1 percent.
The Airtel stock is up 13.92 percent so far this year. During this period, the 30-scrip headline index has risen 12.72 percent and the BSE Telecom index 16.15 percent.
Here's what brokerages said after the company's Q1 performance:
The brokerage has a 'buy' call on the stock with a target price of Rs 675. Goldman Sachs has forecast Bharti Airtel’s wireless segment to deliver more than 20 percent revenue and EBITDA growth in the next two years, and expects its India business to be free cash flow positive starting FY22E. It has also raised its FY2022E-24E EBITDA estimates by up to 2 percent. The brokerage sees upside risks to its estimates in the event of accelerated market share gains from rival Vodafone Idea.
The brokerage has a 'buy' call on the stock with a target price of Rs 655. It said the telecom company's Q1 results were decent despite the COVID pandemic. While the ARPUs have been largely flat for both Bharti Airtel & Reliance Jio this quarter, Jio outperformed on the subscriber addition and overall revenue growth fronts, according to UBS. Any further tweaks to tariffs with an aim to gradually improve ARPUs as well as the response to recent plan changes are key things to monitor, it said.
The brokerage has an 'outperform' rating on the stock with a target price of Rs 750. The company's Q1 performance was largely in line with estimates, though the India mobile business was a tad weaker, it said. Credit Suisse said it would look at the management's commentary on the subscriber trend in Q2 after the second wave of the pandemic, the impact of discontinuation of its Rs 49 plan on subscribers and revenues, the views on the affordable smartphone to be offered by Jio, and the 5G strategy.
The brokerage has a 'buy' rating on the stock with a target price of Rs 730. Bharti Airtel’s 4G penetration at 57 percent of its own India mobile subscribers and its ongoing tariff hikes assure growth, according to CLSA. The brokerage has forecast a 17 percent CAGR in consolidated EBITDA by FY23.
The brokerage has a 'buy' call on the stock with a target price of Rs 660. The Q1 performance was soft on expected lines. The company's mobile revenue growth should show an uptick in Q2 led by the recent select tariff hikes, it said.