Sharekhan has given Buy recommendation for Bharti Airtel with a target price of Rs. 750 in its research report issued on Aug 30, 2021
Sharekhan’s research report on Bharti Airtel
The board approved fund raising up to Rs. 21,000 crore via right issues at Rs. 535/share, which would lead to 7% equity dilution. Promoter’ subscribe to the extent of their entitlement as well as any unsubscribed portion look encouraging. The proceeds from rights issue would help the company to capture opportunities by accelerating investments in the rollout of 5G services, fiber, and data center business. Ongoing tariff hike, steady 4G subscriber additions, and strong growth in other businesses would boost the company’s EBITDA growth at 22% CAGR over FY2021-FY23. The stock trades at a reasonable valuation of 8x its FY2023E EV/EBITDA.
We maintain a Buy on the stock with an unchanged PT of Rs. 750, given its proactive capital raise plan to accelerate growth, ongoing tariff hikes, and reasonable valuation.