Brokerages recommend a "buy" after Bharti Airtel's Q2 results impressed with strong India mobile growth

 Brokerages recommend a "buy" after Bharti Airtel's Q2 results impressed with strong India mobile growth

The fiscal second quarter sales of Bharti Airtel increased by 7% year over year to Rs 37,044 crore, with a 10% year over year rise in its India business to Rs 26,995 crore. However, net profit decreased by 37.5 percent year over year to Rs 1,341 crore.

The telecom behemoth's Q2 FY24 financial results delighted brokerage experts with its success in terms of subscriber growth and India mobile services, so it's possible that Bharti Airtel shares could rise on November 1. Year over year, revenue and EBITDA growth exceeded expectations, while net profit decreased primarily as a result of unusual items.

The fiscal second quarter sales of Bharti Airtel increased 7% year over year to Rs 37,044 crore, with a 10% year over year rise in its India division to Rs 26,995 crore. To Rs 19,665 crore, earnings before interest, taxes, depreciation, and amortization increased. The period's EBITDA margin increased 176 basis points year over year to 53.1%. At Rs 1,341 crore, the net profit for the quarter decreased 37.5% year over year.

With a target price of Rs 1,085 per share, Jefferies made a "buy" recommendation on Bharti Airtel shares in response to the company's strong second-quarter results and increased postpaid and 4G subscriber additions. Additionally, the brokerage said that future capital expenditure reduction would enable the deleveraging of $7 billion from the company's books through FY 2025–2026 and increase stock returns.

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Between July and September, Bharti Airtel saw a 69 percent rise in its total mobile subscriber base, with 27.2 million more 4G/5G data users year over year and 7.7 million more users per quarter.

Due to the strong EBITDA and sales results, CLSA also made a "buy" recommendation on Bharti Airtel shares, with a target price of Rs 1,110 per share.

In Q2 FY23, Bharti Airtel's mobile services ARPU was Rs 190. From July to September, it increased to Rs 203. There were 15.7 million Digital TV subscribers as of Q2 FY24.

See also: Bharti Airtel's Q2 earnings drops 38% to Rs 1,341 crore, with an ARPU of Rs 203.

Additionally, Motilal Oswal rated Bharti Airtel's shares as "buy," noting that the company's home business was a bright spot in the Q2 FY24 results. The brokerage said in a report that "the business continues to grow steadily in the last 12 quarters."

"It has expanded in 1,234 cities versus just 100 cities in FY20 with 2.5x growth in subscribers in the last three years," the statement said, adding that the introduction of the new Xtream AirFibre may potentially contribute to even more rapid acceleration.

Gopal Vittal, MD of Bharti Airtel, said in a post-earnings statement: "This has been yet another quarter of solid revenue growth and improved margins." Our success is based on a straightforward and reliable approach that prioritizes high-quality clients and provides them with the greatest possible digital experience.

The telecom company recorded a fall in revenue of 9.2 percent and EBITDA of 8.7 percent to Rs 10,300 crore and Rs 51,000 crore, respectively, owing to the depreciation of the Naira, despite increase in its subscriber base in Africa.

Analysts may revise their projections after November 1's results call.