On Wednesday, JPMorgan updated its assessment of Bharti Airtel Ltd (BHARTI:IN), increasing the price target to INR 1,670 from INR 1,500 while maintaining an Overweight rating on the stock. The revision reflects a moderation in the expected tariff hike for the fiscal year 2025 from 25% to 17%, which aligns with the company's announcement.
The firm has adjusted its forecast due to Bharti Airtel's effective implementation of past tariff hikes, which have resulted in lower subscriber churn and stable customer usage patterns, especially among 4G plan users. Despite these positive factors, JPMorgan has reduced its estimates for India's wireless revenues and EBITDA by 3-4% over the period from FY25 to FY27.
The new price target also takes into account a forward-looking valuation, moving the reference point from June 2025 to September 2025. The increased valuation for Bharti Airtel's stake in Indus Towers and an updated fair value for Airtel Africa have contributed to the revised price target. Additionally, a reduction in leverage was factored into the updated financial model.
JPMorgan's analysis indicates a continued positive outlook for Bharti Airtel, as the company appears to have effectively navigated the challenges of tariff hikes and subscriber retention. The Overweight rating suggests that JPMorgan views the stock as a better value proposition relative to other stocks in the market.
The price target update for Bharti Airtel by JPMorgan reflects the firm's expectations for the company's financial performance and market position in the coming years. Investors and market watchers will likely monitor Bharti Airtel's progress as it continues to adapt to market conditions and implement its business strategy.
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