Share price of Bharti Airtel hit its all-time high of Rs 531 in early trade today despite the Sunil Bharti Mittal-led telco reporting a higher-than-expected consolidated net loss at Rs 1,035 crore for the third-straight quarter in the current fiscal.
Bharti Airtel share price rose as the telecom major recorded highest ever growth in 4G subscriber addition. The Q3 Indian revenues and ARPU numbers also indicated that the telecom major was amid a sectoral turnaround, brokerages said.
Despite Q3 loss, Bharti Airtel stock price rose 2.3% to a fresh high of Rs 531 on BSE, as against the previous close of Rs 519. Volume-wise, 8.30 and 184 lakh shares traded on BSE and NSE counters, both above 5, 10 and 30-day average volume.
The share currently trades higher than 5, 20, 50, 100 and 200-day moving averages. Bharti Airtel stock has gained 6.18% in the last five sessions. The large cap stock has risen over 16% in one month and 87% in one year.
The telco had reported a profit of Rs 86 crore for the quarter ended December 2018 compared to the consolidated net loss of Rs 1,035 crore clocked in Q3 of current fiscal. The telecom operator had reported a loss of Rs 23,145.60 crore in the September quarter and Rs 2,485.30 crore loss in the June quarter.
Airtel's consolidated revenue grew 10.5% YoY for Q3 at Rs 21,947 crore. The company said its mobile revenues for the quarter rose 9.7% to Rs 15,797 crore. Bharti Airtel's EBITDA was up 4.6% at Rs 9,267 crore and margin stood at 42.2% versus 41.9%.
On a sequential basis, the company's 4G subscriber addition during the quarter at 2.1 crore was highest ever. Its average revenue per user (ARPU)stood at Rs 135. ARPU has risen sequentially for the third straight quarter, helped by higher data usage and tariff hikes, analysts said.
Further, Rs 21,502 crore funds generated through a mix of equity and debt will also help the company to pay dues. Bharti Airtel said in a release, "Pursuant to the infusion of fresh equity and long-term financing via convertible bonds subsequent to the reporting period ended December 31, 2019 and available liquidity/facilities with the group, the management has concluded that the previously reported material uncertainty on the group's ability to continue as a going concern no longer exists".
UBS Group maintained a 'Buy' call for Airtel stock and raised its price target to Rs 615 from Rs 415. The brokerage firm said, "Airtel should stand to gain as Vodafone Idea potentially is unable to sustain".
UBS added it maintained a preference for Bharti amid a sectoral turnaround and added that the current scenario analysis gives comfort in upside to the stock price despite the recent rally.
Morgan Stanley maintained 'Overweight' with a price target of Rs 530 on the stock, although it added the Indian wireless business revenue of the telecom company was better than expectations as ARPU surprised positively. Enterprise business EBITDA was better than the estimate, but (Direct-to-home) DTH business trends were soft, the brokerage added.
As per Reliance Securities, an increase in ARPU may lead to a significant upgrade in EBITDA as the tariff hike may change subscriber addition dynamics and elasticity of demand. At CMP, the stock trades at 10.9x and 8.9x of FY20E and FY21E EV/EBITDA, respectively, the brokerage added in its report.