On Thursday, Jefferies, a global investment banking firm, raised its price target for Bharti Airtel Ltd (BHARTI:IN) shares to INR 1,720 from the previous INR 1,590. The firm continues to endorse a Buy rating for the telecommunications giant.
The adjustment in the price target comes after observing the selective bidding behavior by telecom operators in recent spectrum auctions, which indicates a strategic shift towards a greater emphasis on network monetization. Additionally, higher-than-expected spectrum spending by Vodafone (NASDAQ:VOD) Idea Ltd (VIL) could potentially slow down the pace of market share changes in the future, which is seen as a positive sign for potential tariff hikes across the industry.
Jefferies has maintained its forecast for Bharti Airtel, projecting a compound annual growth rate (CAGR) of 15% in revenue and 16% in EBITDA for the fiscal years 2024 to 2027. However, the firm has slightly reduced its earnings estimates for the company by 2-3%. This revision accounts for the increased spectrum expenses that Bharti Airtel has incurred.
The firm's analyst cited these factors as supportive of continued tariff increases, which are expected to benefit Bharti Airtel's financial performance. The Buy rating is sustained in light of the company's solid growth prospects and the revised price target of INR 1,720 reflects this optimism.
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