Bharti Airtel trades lower as market sell-off offsets gains on upbeat commentary, robust subscriber data

An upbeat commentary from brokerage firms after the tariff hike announcement and robust subscriber data pushed Bharti Airtel's stock slightly above the flatline in early trade on Tuesday. However, selling in the overall market weighed on the stock.

At 9:23 am, the stock was trading 0.6 percent lower at Rs 737.60 on the BSE.

The stock has been gaining for the last two days, rising 4 percent during the period. Bharti Airtel is trading higher than the 5, 20, 50, 100 and 200-day moving averages.

The telecom operator on Monday announced its decision to hike prepaid tariffs by 20-25 percent with effect from November 26.

"Bharti Airtel has always maintained that its mobile Average Revenue Per User (ARPU) needed to be at Rs 200 and ultimately at Rs 300, so as to provide a reasonable return on capital that allows for a financially healthy business model," the company said in a statement.

Citi, CLSA and Jefferies have recommended buying the stock.

Citi said that the 20-25 percent tariff hike announced is ahead of its expectations.

JP Morgan said that the tariff hike will drive an 18 percent increase in ARPU and revenue, while maintaining its ‘overweight’ stance on the stock.

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CLSA is of the opinion that prepaid data hikes could boost India mobile revenue by 14 percent and revenue by another 5 percent.

Meanwhile, Credit Suisse believes Bharti Airtel is favourably placed to benefit from expected recovery in industry.

Bharti Airtel added 2.74 lakh mobile subscribers in September, according to data released by telecom regulator TRAI on Monday.