Bharti Hexacom’s stock jumped by up to 9.5% on July 16 after JP Morgan started covering the stock with an ‘overweight’ rating. The brokerage set a price target of ₹1,280, predicting a 20% increase from the previous closing price.
The shares traded at ₹1,128.7 on the NSE during the day, with trading volumes hitting 1.7 million shares, above the one-month daily average of 1.1 million shares.
JP Morgan highlighted Bharti Hexacom as a strong market player in wireless services compared to Bharti Airtel and Vodafone Idea.
Since its IPO three months ago, Bharti Hexacom’s stock price has doubled. However, JP Morgan’s target is below the record high of ₹1,368.60 reached on June 26.
The brokerage expects a 15% tariff hike in both 2025 and 2026, leading to a 17% annual growth in revenue and 21% in EBITDA from FY24 to FY27.
Hexacom’s ARPU is only 2% lower than Bharti’s, indicating strong potential returns. With increased tariffs and lower capital expenses, dividend payouts are expected to rise from 23% in FY24 to 34% in FY27 due to better cash flow.
The company operates in underserved areas like Rajasthan and the North East, which have low telecom density and internet penetration.
In June, Jefferies downgraded Bharti Hexacom from ‘Buy’ to ‘Hold’ but raised its price target from ₹1,200 to ₹1,290.
Bharti Hexacom was the Bharti Group’s first IPO since Indus Towers (formerly Bharti Infratel) went public in 2012, debuting on the stock market in April 2024.
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