Analysts at Motilal Oswal Recommend Buying Bharti Airtel, Targeting Rs 2355

Bharti Airtel Stock Price Corrects 6% Following NBFC Foray Announcement

Key Highlights:

• Bharti Airtel's (Bharti) stock price corrected approximately 6% following the announcement of its Non-Banking Financial Company (NBFC) foray, resulting in a market capitalization loss of approximately INR 700 billion.
• The overall outlay for the NBFC foray is INR 200 billion, with 70% of the investment coming from Bharti.

Capital Allocation and Outlook

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Bharti's Chairman hosted an investor call to address key investor concerns, focusing on capital allocation, promoter stake sales, succession planning, and the company's NBFC foray. The Chairman emphasized that investors should consider the company's growth potential, given its history of judicious capital allocation, rather than solely focusing on dividend payments.

Valuation and Rating

Following the recent correction, Bharti's India business is now trading at an implied valuation of approximately 10x FY28 EBITDA, based on our estimates. We reiterate our BUY rating on Bharti with an unchanged SoTP-based Target Price (TP) of INR 2,355 (bull case: INR 2,875; bear case: INR 1,810).