Bharti Airtel shares jump 2% after Q1 PAT jumps 158% YoY. Should you buy?

Shares of leading telecom company Bharti Airtel gained 2% on Tuesday to its day’s high of Rs 1,393.95 on BSE after the company reported a 158% year-on-year (YoY) surge in its Q1 PAT at Rs 4,160 crore, beating the Street estimates by a wide margin.

Revenue from operations for the reporting period increased 3% YoY to Rs 38,506 crore, which is marginally below the poll estimates of Rs 38,523 crore. India revenues for the first quarter rose 10% YoY to Rs 29,046 crore. Mobile revenues grew by 10% YoY on the back of improved realisations during the quarter and sustained customer additions.

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ARPU stood at Rs 211 in the April-June 2024 period as compared to Rs 200 in the same period of last year, driven by sustained focus on acquiring quality customers and delivering greater value.

Here is how brokerages viewed the results:

Macquarie on Airtel: Neutral| Target price: Rs 1,280

Macquarie maintained a Neutral rating on Airtel with a target price of Rs 1,280.

The company witnessed a softer growth momentum while PAT beat was led by one-offs. India EBITDA margin expansion was led by lower network costs and Macquarie believes that the ARPU miss could weigh on short-term sentiment.

UBS on Airtel: Neutral| Target price: Rs 1,530

UBS has retained its Neutral call on the stock with a target price of Rs 1530.

Airtel saw a muted quarter although all eyes will be on the impact of tariff hikes in coming quarters. Update on enterprise business which has been below expectations in past few quarters will be important to track.

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