Bharti Airtel down 4% even as analysts see ARPUs bottoming out

Brokerages observed that average revenue per user (ARPUs) could have bottomed out and the company could look at fund raising to tackle competition.

Shares of Bharti Airtel were down over 4 percent in morning trade on Monday even as global brokerages maintained a positive outlook on the stock. 

The stock touched an intraday high of Rs 332.95 and an intraday low of Rs 319.25.

Brokerages observed that average revenue per user (ARPUs) could have bottomed out and the company could look at fund raising to tackle competition.

Credit Suisse said that the company’s management believes overall average revenue per user (ARPU) has bottomed out. Further, it expects pressure on revenues, EBITDA and cash flow to persist till Jio is in a market share grabbing mode. It also sees capex staying higher for longer span than management guidance.

The global research firm observed that despite Jio's entry, the company has maintained /slightly increased market share. Further, the focus is to win decisively in 4G via better network experience and OTT partnerships. The company has said that its strategy is to consolidate in the short term and build in the long term.

Deutsche Bank said that the company is striking an optimistic outlook on ARPU and capital expenditure. The company could raise capital if necessary to remain competitive. Further, it also believes that ARPUs have stabilized and expects pricing trends to be stable.

At 10:40 hrs Bharti Airtel was quoting at Rs 327.80, down Rs 5.80, or 1.74 percent, on the BSE.

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