Citigroup downgrades Bharti Airtel to 'neutral' from 'buy'
MUMBAI: Citigroup Global Markets has downgraded shares of Bharti Airtel to 'neutral' from 'buy' stating that competition is likely to remain high in the sector.
Moreover, the value of Bharti Infratel, in which Bharti Airtel owns 71.96% stake, is likely to get impacted due to the potential merger between Vodafone and Idea Cellular.
Recent rally in the stock is likely to limit upside, added Citi.
"Spectrum portfolio, good execution and a healthy B/S (balance sheet) will help it defend market share but it would have to compete with a stronger player. Merger’s impact on Infratel and recent rally will also limit upside," said Citi.
However, Citi raised target price on Bharti Airtel to Rs 380 from Rs 365 as it rolled forward the target to FY18 from September 2017.
On Idea Cellular, the global bank has raised target price to Rs 100 from Rs 70, factoring in benefit of a potential merger with Vodafone. However, it has retained 'sell' rating on Idea.
The brokerage said that Idea's third quarter results highlighted its relative vulnerability to Jio compounded by relatively weaker execution and leverage. Moreover, the recent rally in the stock more than prices in upside.
Moreover, the value of Bharti Infratel, in which Bharti Airtel owns 71.96% stake, is likely to get impacted due to the potential merger between Vodafone and Idea Cellular.
Recent rally in the stock is likely to limit upside, added Citi.
"Spectrum portfolio, good execution and a healthy B/S (balance sheet) will help it defend market share but it would have to compete with a stronger player. Merger’s impact on Infratel and recent rally will also limit upside," said Citi.
However, Citi raised target price on Bharti Airtel to Rs 380 from Rs 365 as it rolled forward the target to FY18 from September 2017.
On Idea Cellular, the global bank has raised target price to Rs 100 from Rs 70, factoring in benefit of a potential merger with Vodafone. However, it has retained 'sell' rating on Idea.
The brokerage said that Idea's third quarter results highlighted its relative vulnerability to Jio compounded by relatively weaker execution and leverage. Moreover, the recent rally in the stock more than prices in upside.
