Gladiator Stocks - Bharti Airtel - ICICI Direct

Technical View

Telecom sector has relatively underperformed the benchmark in CY21. We believe rejuvenated upward momentum in heavyweight Airtel would drive the sector higher. The share price has approached maturity of price/time wise correction as over past six months it retraced merely 50% of preceding four months rally (Rs. 393-623), highlighting strong base formation. Thereby, offering fresh entry opportunity with favourable risk reward

The stock has formed a higher base above 52 weeks EMA and currently resolving out of past two months range (550-520) coincided with five months falling trend line, indicating resumption of primary up trend that augurs well for next leg of up move

Fundamental View

Bharti Airtel (Airtel) is India's second largest telecom operator with a revenue market share of 32% (vs. new operator's revenue market share of ~40% and Vodafone Idea ~21%) as on Q2FY20. The company has 32.1 crore wireless customers in India and ~11.8 crore subscribers across operations in 14 African countries.

One of the key changes in Telecom Industry has been consolidation of Industry. From 9-10 private players in 2015, it is down to three private players market (with Airtel & Jio being strong with superior operating metric and balance sheet.). We see the favourable industry structure of three players (with two being strong), a good enough kicker for eventual hike in tariff as well as superior digital play in the medium to long term. We have seen initial signs of operators now tweaking their offering (lowering data usage etc), and recent increase in post paid tariff especially moving the minimum corporate pack up to Rs. 299/month to Rs. 199/month etc. in order to increase implied APRU. Thus signalling that it is a step in the right direction

For details, click on the link below: Link to the report

Shares of BHARTI AIRTEL LTD. was last trading in BSE at Rs. 548.55 as compared to the previous close of Rs. 546.5. The total number of shares traded during the day was 1293006 in over 18981 trades.

The stock hit an intraday high of Rs. 560.5 and intraday low of 532.85. The net turnover during the day was Rs. 710049784.

Source : Equity Bulls

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