Bharti Airtel: JPM raises to ‘overweight,’ sees stronger earnings

Investing.com-- JP Morgan analysts upgraded Bharti Airtel Ltd. (NS:BRTI) to “overweight” and also hiked their price target on the telecom operator, citing stronger earnings potential from increased tariffs in India and better returns on capital.

JPM upgraded the stock to “overweight” from “neutral,” and increased its price target to 1,500 rupees from 1,100 rupees, representing an upside of nearly 12% from current levels.

Airtel’s fiscal 2024 earnings were largely in line with expectations. The telecom operator, which is among India’s biggest, clocked a 2% increase in quarterly revenue to 221 billion rupees, while adjusted earnings before interest, tax, depreciation and amortization rose to 122 billion rupees, bringing annual EBITDA to 790.45 billion rupees.

JPM analysts said they now expected EBITDA to increase 9% in fiscal 2025 and 14% in fiscal 2026, driven by higher average revenue per user, as well as a flat 25% hike in tariffs in the coming year. 

JPM analysts also said they expected dividends to “increase meaningfully” over the next two fiscal years amid improving cash flows and further deleveraging. 

Among other brokerages reacting to Airtel’s Q4 earnings, Citi reiterated its “buy” rating and target price of 1,520 rupees, while HSBC maintained “hold” and slightly hiked its target price to 1,220 rupees from 1,125 rupees.

Airtel rose 2.4% to 1,340.65 on Thursday.