On Friday, Axis Capital (NYSE:AXS) Limited adjusted its price target on Bharti Airtel Ltd (BHARTI:IN) shares, increasing it slightly to INR 1,751.00 from INR 1,749.00. The firm continues to recommend a Buy rating for the telecom operator.
The revision reflects Bharti Airtel's strategic focus on premium services and convergence, which has led to a significant rise in its post-paid subscriber numbers.
Bharti Airtel's converged product, Airtel Black, is gaining substantial ground, as indicated by a 56% surge in its subscriber base. Additionally, the service accounts for 35% of the company's broadband additions. The company's direct-to-home (DTH) segment is also beginning to show promising signs of growth.
Despite the absence of a tariff hike and the monetization of 5G services, Bharti Airtel's average revenue per user (ARPU) grew by 8%. Due to anticipated tariff hikes and the monetization of 5G services, ARPU is expected to continue climbing in FY25.
The uptake of 5G technology is accelerating, supported by an increase in compatible handset shipments and enhanced customer experience. Other segments of Bharti Airtel's business have also remained robust. Following a record capital expenditure (capex) of INR 330 billion in FY24, projections indicate a reduction in capex in the future.
Despite the substantial investments made in the previous fiscal year, Bharti Airtel's net debt to EBITDA ratio improved, decreasing to 2.6 times from 3 times in FY23.
This financial improvement has led Axis Capital to adjust its estimates and revise the price target for Bharti Airtel to INR 1,751 while maintaining its positive outlook on the stock.
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