CLSA, a well-known investment company, has given a thumbs-up to Bharti Airtel, calling it the best choice in India’s telecom industry. They see lots of ways for growth with other companies like Indus Towers, Tata Communications, Bharti Hexacom, Sterlite Technologies, and Vodafone Idea. CLSA expects big things to happen because of higher prices for services, more people using data, and the expected IPO of Reliance Jio.
Bharti Airtel stands out due to its strong position in the market and its premium subscribers. They have plans to roll out 5G technology, which will help them attract even more customers. CLSA set a target price of Rs 1,860 for Bharti Airtel, anticipating that their average revenue per user (Arpu) will reach Rs 290 by the financial year 2027.
Indus Towers and Tata Communications are also seen as good investments, receiving positive ratings. Indus Towers has a target price of Rs 575, and CLSA stresses its important role in the growing 5G infrastructure. Tata Communications is given a target price of Rs 2,220, benefiting from the rapid growth of its data services, which make up 85% of its total earnings. They expect a growth rate of 15% in data revenue by 2027.
Bharti Hexacom, a part of Bharti Airtel, has a target price of Rs 1,325, but its dependence on one market raises some concerns. Sterlite Technologies is given a target price of Rs 110, but it faces challenges with high debts and weak demand in some areas. Vodafone Idea is struggling the most, with a target price of just Rs 6 due to its large debt and slow 5G rollout.
Overall, CLSA predicts that the telecom sector will grow by 12% by 2027, mainly due to higher average revenue per user and wider use of 4G and 5G. The upcoming Reliance Jio IPO is expected to increase the value of companies in this sector. With strong fundamentals and more people using data, CLSA believes the Indian telecom sector is a promising place to invest.
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