Global brokerages see 66% upside in Bharti Airtel; should you buy?

Credit Suisse and Macquarie continued to retain their bullish view on Bharti Airtel with a price target of Rs 700, indicating an upside of 66 per cent from the current market price.

BCCL
Airtel shares declined to an intraday low of Rs 420.25 on September 24 from Rs 546.75 on September 1.
Shares of telecom major Bharti Airtel has corrected over 23 per cent in September so far due to concerns over delay in mobile tariff hike. The launch of postpaid plans by Reliance Jio this week further weighed on sentiments.

The scrip declined to an intraday low of Rs 420.25 on September 24 from Rs 546.75 on September 1.

On the other hand, global brokerages Credit Suisse and Macquarie continued to retain their bullish view on Airtel with a price target of Rs 700, indicating an upside of 66 per cent from the current market price.


Credit Suisse believes that current pricing is not sustainable and therefore expect a price hike in the medium to long term.

“We believe the timing of price hike is a bit unclear, given the current tepid macroeconomic environment and lack of urgency on Jio’s part (post recent fund raise),” Credit Suisse said.

After unleashing a price war in mobile tariffs and fibre broadband services, billionaire Mukesh Ambani-led Reliance Jio on Tuesday unveiled postpaid plans, bundling up to 500 GB of data and subscription to Netflix, Amazon Prime and Disney + Hotstar.
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JioPostPaid Plus for mobile customers will have monthly tariffs varying from Rs 399 to Rs 1,499 with different benefits, the company said in a statement.

Macquarie said that the best strategy to increase tariff is to entice subscribers to upgrade by providing attractive content bundles. With only 5 per cent of mobile subscribers on prepaid plans with large content bundles, there is a lot of room for both Airtel and Jio to grow.
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