Bharti Airtel share price locked at 10% upper circuit; What should investors do?

Bharti Airtel share price locked at 10 percent upper circuit on October 28 a day after the company reported its second quarter (Q2FY21) earnings.

There were pending buy orders of 1,840,472 shares, with no sellers available.

On October 27, the company reported a consolidated net loss of Rs 763.2 crore for the September quarter of FY21 against a loss of Rs 23,044.90 crore in Q2FY20 and Rs 15,933.1 crore in Q1FY21.

The company's consolidated revenue came in at Rs 25,785 crore for the quarter ended September 30, 2020.

Consolidated EBITDA came at Rs 11,848.3 crore, while EBITDA margin came at 46 percent.

The company board approved to exit the Ghanaian telecom market as the Government of Ghana will acquire 100% shares of Airtel Ghana along with all customers, assets and agreed liabilities, as per release.

The parties are in advance stages of discussions for conclusion of the commercial agreement for the transfer of AirtelTigo on a going concern basis to the Government of Ghana. Accordingly, Airtel is voluntarily taking an impairment charge of Rs 1,841 million.

AirtelTigo is a joint venture between 'Airtel' and 'Millicom' wherein Airtel holds a noncontrolling 49.95% share in AirtelTigo.

Here are the brokerages view on the stock:

Dolat Capital

to reversal of some of its recent underperformance. While tariff increase is a welcome potential trigger and inevitable for a threeplayer market structure, Bharti is well-poised to gain market share and grow even in absence of the same.

Investors would be better-off not-losing the sight on long-term potential upsides for short-term delay in tariff hikes. Reiterate buy with revised target price of Rs 663 at 10/6x Sep-22E EV/EBITDA for India Wireless/Africa.

UBS

Research house UBS has maintained buy rating with a target at Rs 655. The Q2 earnings an all-round beat. Company remains well placed in sector given its investment head-start, reported CNBC-TV18.

Goldman Sachs

Goldman Sachs has maintained buy rating with a target at Rs 635. According to Goldman Sachs, the execution continues to be near-flawless and Q2 results solid beat across both topline & EBITDA.

The key surprise was a strong data subscriber addition and we expect an ARPU increase in December quarter.

It raise EBITDA estimates by 3-6% as the recent weakness offers a compelling entry point. The company offers 27% EBITDA CAGR over next three years, reported CNBC-TV18.

Citi

Research firm Citi has kept a buy call and target at Rs 690. The results were across-the-board beat with India mobile shines. The revenue/EBITDA beat our estimates by 5%/9%, said Citi.

India mobile is a key driver of the beat, with revenue up 7% QoQ, reported CNBC-TV18.

BofAML

The research house has maintain buy on positive risk reward and kept target at Rs 640. The earnings were beat led by cellular business & cost control.

The implied ARPU increased 6% to Rs 161 QoQ. The strong business momentum continues, reported CNBC-TV18.

CLSA

Research house has kept buy rating with a target at Rs 715. The revenue & EBITDA were led by strong India mobile data traction, said CLSA.

The gearing is comfortable at 2.9x EBITDA, while stock valuation is at a 25-50% discount, reported CNBC-TV18.

At 09:45 hrs Bharti Airtel was quoting at Rs 476.65, up Rs 43.30, or 9.99 percent on the BSE.