JP Morgan raises price targets on telecom Cos

Brokerage JP Morgan has raised its price targets for Indian telecom companies and sees an 8-38% upside in these stocks by December 2025. The brokerage upgraded its rating on Vodafone Idea from 'Underweight' to 'Neutral', while maintaining Indus Tower as its top telecom pick.

The brokerage estimates tariff hikes of 15% in FY27E for the three telcos - Bharti Airtel, Bharti Hexacom and Vodafone Idea - which is expected to lead to better revenue inflows, despite some subscriber losses for Bharti and Idea in Q2.

"The unfavourable AGR ruling by the Supreme Court last month necessitates annual tariff hikes for Idea to be able to pay the spectrum dues (including AGR dues outstanding)," said JP Morgan's analysts Ankur Rudra and Bhavik Mehta in a note to clients.




"Affordability of service and a benign regulatory environment give telcos the headroom to take successive tariff hikes before reaching the average trend of Asian peers. We think this could precipitate persistent tariff repair over the next few years."

Indus Towers is expected to benefit from Idea's monthly payments along with continuous tower adds in FY25, it said.