Bharti Airtel has joined the elite club of Rs 3-trillion market capitalization (market-cap) as shares of the telecom services provider hit a new high of Rs 550, up 3 per cent on the BSE on Thursday in the intra-day trade.
Reliance Industries (RIL), Tata Consultancy Services (TCS), HDFC Bank, Housing Development Finance Corporation (HDFC), ICICI Bank, Infosys and Kotak Mahindra Bank are the other companies having market-cap of more than Rs 3 trillion.
Currently, Bharti Airtel stands ahead of the state-owned banking major State Bank of India (SBI), non-banking finance company Bajaj Finance, and fast moving consumer goods company ITC.
Bharti Airtel was trading higher for the sixth straight day, having rallied 12 per cent, as compared to a per cent's rise in the S&P BSE Sensex during the period. With today’s gain, the stock has soared 62 per cent in the past four months from a level of Rs 340 hit on October 4, 2019, as against a 10 per cent gain in the benchmark index.
Pursuant to the infusion of fresh equity and long-term financing via convertible bonds, and available liquidity/facilities with the Group, the management has concluded that the previously reported material uncertainty on the Group’s ability to continue as a going concern no longer exists.
Bharti Airtel successfully raised Rs 21,502 crore of funding through a combination of fresh equity issuance via qualified institutional placement and issue of convertible bonds last year.
Meanwhile, the telecom operator posted a strong operational performance for the quarter ended December 31, 2019 (Q3FY20), lifted by an improvement in average revenue per user (ARPU).
The company’s consolidated revenues increased by 8.5 per cent year on year (YoY) to Rs 21,947 crore in Q3FY20, as compared to Rs 20,231 crore in the year-ago period.
On the operational front, the company posted an improvement in ARPU from Rs 128 to Rs 135, sequentially.
Consolidated earnings before interest, tax, depreciation and amortisation (Ebitda) jumped 48.3 per cent YoY at Rs 9,350 crore. Consolidated Ebitda margin improved to 42.6 per cent in the quarter as compared to 31.2 per cent in the corresponding quarter last year.
However, Airtel posted a net loss of Rs 1,035 crore for the quarter, as it provisioned for the interest accrued on account of AGR (adjusted gross revenue) payment.
Analysts at SBICAP Securities remain positive on the stock and believe there is upside up to Rs 580 levels.
"This case factors in a gradual improvement in market share and, more particularly, improvement in ARPUs driven by tariff hikes undertaken in Q3. The positive surprise is that the company expects to see the full impact of the tariff hike in Q4, contrary to our earlier expectation that it could take a couple of quarters more", the brokerage firm said in result update.