Bharti Airtel needs no introduction and therefore, I do not have to write much, but will give a short thesis.
Bharti Airtel is one of the world’s largest telecom company (w.r.t no. of subscribers) and “was” operating in one of the most cost competitive country for the sector till last year. Fortunately this company has been able to withstand the JIO on-slaught and to its credit, its the only one that has managed to survive without question marks on its survival. So, now this industry has become a 2 or 3 players industry with data being the next significant growth driver. This augurs well for Bharti and in the recent con-call they have clearly mentioned that they expect the ARPU’s to double. This, not only signifies the bottom of ARPUs but also signals a significant growth.
The recent Covid crisis has underlined the strategic importance of the sector along with Pharma and Consumption and therefore, I strongly believe the stock should also get re-rated along the lines of these other two sectors (approx.). Also, Bharti is much more than a plain vanilla telecom company. It also has a lot of embedded value. It has a big tower infrastructure business (Bharti infratel), Digital TV services business (DTH) and a Payments Bank. Further, there’s also a feeling that Bharti may follow the same path as JIO and may build a technology ecosystem around its network which could further cascade its re-rating.
Technically, the stock has broken out of 12 yrs long consolidation on the monthly charts and therefore, is very strong. A sustained move beyond 600 should increase the momentum significantly. Most importantly in the times that we are living in currently, this would provide significant stability to portfolio.
My personal thesis is that the company is getting re-rated on back of growth and was one of the handful of stocks to outperform the carnage and has infact shown growth in earnings. I believe Bharti Airtel has a long runway ahead.
God Bless !!!
Disclaimer: It is safe to assume that I have some vested interests in the stock. Also, the above stock story is my personal view in individual capacity and I am not a SEBI Registered Research Analyst. For rest, please look at the About page.