Avendus has reiterated its reduce rating on Bharti Airtel, assigning a target price of ₹1,700 per share, which implies a downside of around 19% from the current market price of ₹2,090.90. The brokerage said future outcomes for the stock will largely depend on tariff hikes, government action on Vodafone Idea, and the overall level of competitive intensity in the telecom sector.
In its note, Avendus highlighted that while Airtel’s average revenue per user (ARPU) appears low in absolute terms, it is high on a purchasing power parity (PPP) basis and relative to income levels in India. This, according to the brokerage, could limit the scope for sharp or frequent tariff increases without risking demand elasticity.
Avendus also flagged structural constraints on long-term growth, noting that reinvestment opportunities beyond maintenance capex remain limited in the current industry structure. While Airtel continues to benefit from scale, strong execution and balance sheet stability, the brokerage believes incremental value creation is increasingly dependent on external factors rather than internal levers.
Overall, Avendus remains cautious on the stock at current valuations, arguing that meaningful upside would require a combination of sustained tariff hikes, favourable regulatory or policy developments around Vodafone Idea, and a benign competitive environment—factors that remain uncertain in the near to medium term.
Disclaimer: This article is for informational purposes only. The views expressed are those of the brokerage cited and do not constitute investment advice or recommendations.
