Shares of Bharti Airtel rose 1% and hit a record high of Rs 1,949 on June 23 after global brokerage Jefferies doubled down on its bullish stance on the telecom major.
Jefferies cited strong fundamentals and favourable industry dynamics as the core factors driving bullishness for the company. In a recent note, Jefferies touted Bharti Airtel its top pick in the telecom space, outlining four key reasons why it believes the stock deserves a place in investors' portfolios. Topping them is Airtel's position as a strong proxy for India’s consumption growth, given its scale and the relatively low level of competition in the market.
Jefferies also sees a significant runway for mid-teen revenue growth, supported by ongoing digital adoption and data consumption. The brokerage highlighted a structural decline in capex intensity, which could strengthen free cash flows in the years ahead. Combined with attractive valuations, Jefferies believes the stock is ripe for a re-rating, pegging a price target of ₹2,370, implying an upside of 27% from current levels.
However, the note was not without caution. Jefferies listed several downside risks that could derail this bullish narrative, including the absence of fresh tariff hikes, slower-than-expected monetisation of 5G, higher capex requirements, and potential market share erosion in a rapidly evolving telecom landscape.
Earlier this month, Macquarie also raised its price target on Bharti Airtel from ₹1,800 to ₹2,050, maintaining its ‘outperform’ rating. The brokerage highlighted the improving outlook for return on invested capital (ROIC) and a solid free cash flow profile, adding that a tacit industry-wide tariff floor is likely to support profitability going forward.
"We see an effective industry tariff put, higher free cash flow, and improving return on investment capital, a dynamic that has been materially supportive for our preferred fundamental idea, Bharti Airtel," Macquarie wrote in its report.
Shares of Bharti Airtel have delivered nearly 13% returns in the last three months.
