Airtel stocks slip 4%, should you buy the dips? Here's what experts suggest

SUMMARY

A little bit of a downtrend was seen in Airtel shares today. The stock slipped 4 percent to trade at Rs 586.85 after the board announced it is considering a fundraise on August 29. While Jefferies has maintained a buy rating on the stock, here's what market experts have to say about its short-term outlook.

By CNBCTV18.comAug 26, 2021 5:34:19 PM IST (Published)

Amarjeet Maurya - AVP - Mid Caps, Angel Broking: Today Bharti Airtel Ltd (BAL) stock is down ~4 percent, which provides buying opportunities to long term investors. In Q1 FY22, BAL has shown healthy revenue growth of ~12 percent and adjusted Profit growth of ~102 percent. Going forward, we expect BAL to report healthy top-line and bottom-line growth on the back of a strong brand, growth in customer additions, and improvement in ARPU due to an increase in tariffs rate. Hence, we are positive on the stock.

Nischal Maheshwari of Centrum Broking: We do not cover it but I continue to be positive around BhartiAirtel. It is coming around to being a duopoly in the country with Vodafone having problems of its own. I believe this is just profit taking which is happening at BhartiAirtel because people are expecting that if and when dilution happens, it will be at a lower rate and they will be able to get a lot of stock at a lower rate. So I see that kind of a profit booking happening otherwise I don’t see any reason for sell-off happening in Bharti Airtel. No need to panic, one should be accumulating this stock around these prices.

Mehraboon Irani, Market Expert: This is a sector which despite being a cash generation sector also continues to throw out cash. As far as the rights issue of Bharti Airtel goes, I don’t think anybody amongst us expected it. They are going to possibly pare debt that something on which they have worked quite well over the last three-four years. This is something which is going to be very interesting to know maybe a couple of days later but at the end of it. I personally believe that at the current price there is nothing wrong in holding Bharti Airtel but we will need to know if they are going to invest a little bit more in Indus Towers and other types of things. So I would say that I would allow this company rights issue or raising of fund issue possibly as a pass right now because at the present valuations, despite this announcement not coming, I would not come out and stick my neck and say go and invest in Bharti at the present price.

Rahul Sharma, JM Financial:Overall telecom sector looks positive to Sharma and he believes that Bharti Airtel has been in a consolidation for the last 14 years and that might be coming to an end. "We may see a closing above this breakout point above Rs 600. This is clearly indicating that there is a big shift that has happened on this stock, we saw the stock doing fairly well in the last month and the outperformance should continue. Fundamentally, the market is remaining like a duopoly as of now, that is indicating that there is more upside in something like Bharti Airtel. If somebody has to play a pure-play telecom sector, Bharti Airtel is the leader. Rs 800-850 target in the next 12 months is very much possible on Bharti Airtel. As an investor one should stay put."

Market Watch: Jigar Mistry, Co-Founder, Buoyant Capital: Let us assume that this becomes a three-player market, even then those two players essentially will be Jio will be number one and Bharti Airtel number two. If it were to become a two-player market, then it is an even better scenario for Bharti, but that is sort of not our base case scenario. Now going forward, you know, given where Reliance Jio is and where Bharti has been adding subscribers over the last two months or so, they also started taking price increases, I think Jio will eventually reciprocate, and things would look better from there. Also, the way Bharti has gone ahead and digitise their assets like what Jio had done, there is some amount of, sort of unlocking that can potentially happen in Bharti so we have held it for quite a while now, it is still interesting for us.