Bharti Airtel shares plunged nearly 2% to 695 apiece in Wednesday’s BSE trading session despite telecom operator Bharti Airtel more than doubling year-on-year (YoY) in consolidated net profit to 2,008 crore, supported by an increase in average revenue per user (ARPU) and an exceptional gain.

“We believe that steady market share gains through higher network quality, improved ARPU through implied price hikes and 4G upgrades and impressive digital metrics should lead to a reassessment. Reiterate OW “JPMorgan said in a note.

The brokerage has an overweight rating on Bharti Airtel shares with a price target (March 2023) of 900 on ARPU, driving strong growth and above-expected subscription additions.

The telecommunications company’s operating revenue increased by more than 22% to reach 31,500 cr in the fourth quarter of FY22, compared to the prior year period. Airtel’s Average Revenue Per User or ARPU, a key metric for all telecom operators, arrived at 178 for the quarter, versus 145 in Q4’21. Sequentially too, the APRU was significantly higher than 163 connected during the December quarter.

“India Mobile EBITDA up 12% QoQ (online) on healthy revenue growth driven by ARPU, incremental EBITDA margin remains healthy at 64%. Airtel is the only player to saw subscriber growth in the quarter despite price hikes that sparked SIM card consolidation in the industry,” said national brokerage firm Motilal Oswal, which has a buy rating on the telecommunications title.

The opinions and recommendations made above are those of individual analysts or brokerage firms, and not of Mint.

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