The firm upgraded the stock to a “Buy” rating, setting a target price of ₹1,875, citing reasonable valuations and strong growth prospects.
ICICI Securities highlighted that Bharti Airtel’s valuation metrics, when assessed on an EV-to-EBITDA basis, appear high compared to its Asia-Pacific (APAC) peers.
Bharti is trading at 11.3x, while APAC peers average 7.1x. Despite this, the brokerage firm emphasised that Bharti’s robust growth trajectory justifies the premium.
Bharti Airtel is projected to achieve earnings growth of 14.5%-15%, significantly outpacing the sub-5% growth rate of its APAC counterparts. This substantial growth potential positions the telecom giant favourably in the market, according to the brokerage.
ICICI Securities also pointed to Bharti Airtel’s strong free cash flow yield as a critical factor in its positive assessment. Globally, telecom companies are valued for their free cash flow and dividend payouts.
Bharti Airtel’s free cash flow yield stands at 6.7%, which represents a 10% premium over APAC peers. The firm believes this metric underlines the sustainability of Bharti’s financial performance, with free cash flow expected to grow over the next couple of years.
On Friday, the stock climbed 4.28%, closing at ₹1,627.15 per share. The company, headquartered in New Delhi, currently has a market capitalisation of ₹9,42,592 crore and has delivered returns of around 60% year to date.
