Buy Bharti Airtel; target of Rs 710: Sharekhan

Sharekhan's research repor on Bharti Airtel

Beat on revenue and margin fronts; ARPU improvement surprised positively, led by strong net 4G subscriber additions; growth was broad-based across portfolio, though star segment was India wireless business (EBITDA grew 12.8% q-o-q). Digital capabilities have been helping Bharti to acquire quality customers, increase wallet share, reduce churn rate and strip out waste from the business; digital services though partnership to aid growth going ahead. We remain positive on Bharti, considering its strong EBITDA performance, continued growth in the number of 4G subscribers and potential improvement in free cash flows; recent correction in stock price increased the valuation gap with Reliance Jio.

Outlook

We maintain our Buy rating on Bharti Airtel with an unchanged price target (PT) of Rs. 710, given favourable market structure and continued weakness in Vodafone Idea.

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