Bharti Airtel Shares Surge 10% Despite Rs 5,237 Crore Q4 Loss; Here's Why

The share price surge comes on the back of customers upgrading their data and calling plans and the rise in mobile tariffs which led to the increase in average revenue per user.

Most brokerage firms kept the ratings buy hinting at the company’s prospect in the market. (Representative Image/ Getty)

New Delhi: Even as Bharati Airtel reported a loss of Rs 5,237 crore loss for March quarter, but the company’s share rose 10 per cent to a record high on Tuesday. The scrip jumped 9.99 per cent to hit a high of Rs 591.95 on the BSE. At present, the telecom operator is trading at Rs 596.20 in the NSE Nifty stock. The share price surge comes on the back of customers upgrading their data and calling plans and the rise in mobile tariffs which led to the increase in average revenue per user. The telecom’s operator average revenue per user or Arpu grew 14 per cent sequentially compared to 1.7 per cent increase in Reliance Jio’s Apru. Cumulatively Arpu at Airtel has expanded by about 20 per cent in the past two quarters, compared to 2 per cent growth at Reliance Jio, according to Livemint report. Jefferies, a brokerage firm noted that the company’s strong data subscriber additions despite sharp tariff hikes reflect consumer acceptance of higher tariffs. Other experts observe that the Arpu increase showcases the company’s ability to command a price premium in the market even as the competition has now gradually shifted to a network quality. CLSA Ltd, capital markets and investment group, said in the Economic Times report that mobile revenue came better than estimates and Airtel Africa remained a surprise. The brokerage firm has retained a buy rating on the company’s stock with a price target of Rs 670. Most brokerage firms kept the ratings buy hinting at the company’s prospect in the market. According to Motilal Oswal Financial Services Ltd analyst as reported by Livemint, Airtel has garnered more than 40 per cent estimated incremental market share in 4G subscribers last quarter. Data traffic on the company’s network also grew by an impressive 16 per cent sequentially. The operator’s total minutes of usage on the network during the March quarter stood at 902 billion, showcasing a 13.3 per cent growth over 796 billion minute in the corresponding quarter last year, said Motilal Oswal which also maintained a ‘buy’ rating on the stock.

Even Credit Suisse has given a price target of Rs 600 on the stock. The brokerage firm also supported the stock on the back of the 14 per cent sequential Arpu growth. Although the telecom operator on Monday said it took a hit from an exceptional item of Rs 7,004 crore in the quarter, which consist of mainly of a charge on account of reassessment of regulatory cost based on a recent judgment on one-time spectrum charge (OTSC)-related matter.