(Disclosure: Reliance Industries Ltd, which owns Jio, is the sole beneficiary of Independent Media Trust that controls Network18, the parent company of CNBCTV18.com.)
Bharti Airtel share price hit a fresh record high of Rs 693.70, rising over a percent on Monday on the BSE after global brokerage CLSA raised the target price on the stock.
CLSA retained its forecast of 50 percent Ebitda growth by FY24CL, led by 4G subs ramp-up and an Arpu rise. It reiterated a 'buy' call and raised the target price to Rs 825 per share from Rs 780 earlier.
In five years of Jio’s operations, Bharti Airtel has the sector’s highest active mobile subscribers. It has added 184 million 4G subscribers, with pan-India 4G network and the highest spectrum. Airtel has responded to Jio’s discounted tariffs and JioPhone bundling by ramping up its 4G and post-paid subscribers, enabling leading Arpu of Rs 146 versus Rs 138 for Jio, CLSA said.
Even as Jio garnered 38 percent sector revenue market share, Bharti retained all-India revenue market share at 33 subscribers, its market share in metros (33 percent), and gained in A & B circles, underscoring the strength of its 4G network.
Jio’s launch triggered exponential growth in mobile data, with Bharti Airtel seeing an 18x jump in per-sub usage to 18GB/month in five years. At the peak of competition from Jio, Bharti Airtel lost 8 million data subscribers, but thereafter it added 184 million 4G subscribers.
“These still comprise 57 percent of its own 321 million mobile subscribers, reflecting an immense opportunity to grow data revenues. Bharti’s Arpu at Rs 146 is up 46 subscribers from lows in 2QFY19; its rising 4G subs and tariff hikes will drive Arpu 36 subscribers higher to Rs 199 by FY24CL,” CLSA said.
Further, Bharti Airtel has been relentless in network investments and spent capex of $14.6 billion in India over five years.
Bharti also kept gearing under control at 3x net debt/Ebitda via fundraising and asset monetisation. Besides cash flows and the $2.8 billion rights issue, Bharti has the option to monetise its 41.7 percent stake (worth $3.7 billion) in Indus Towers and 56 percent stake in Airtel Africa (worth $2.6 billion), the brokerage house noted.
At 10:15 am, the shares of Bharti Airtel were trading 0.64 percent higher at Rs 690.70 apiece on the BSE.