Here are brokerage stocks on three stocks
Citi expects Bharti Airtel ’s operating metrics to improve Q4 onwards. It has revised target price Of Bharti Airtel to Rs 360 from Rs 415 per share. It has also revise target price of Idea to Rs 70 from Rs 91 per share.
Deutsche reiterates buy call on Bharti Airtel with a target price of Rs 470-520 per share. It also has a buy rating on Idea. It says Jio’s offers will not impact the revenue-table of the sector as investors underestimating strength of Bharti’s franchise and cost position.
CLSA retains buy on Bharti Airtel with target cut to Rs 398 from Rs 440 per share. It has a sell rating on Idea Cellular with target decreased to Rs 79 from Rs 94 per share. It says Jio’s higher ARPU plans offer 12-47 percent discount to Bharti’s data plans. It estimates lower FY17-18 EBITDA & earnings for Bharti and Idea by 2-19 percent. It adds that key for Jio will be subscriber retention beyond free offers.
Goldman Sachs says Jio’s data prices are approximately 25 percent cheaper versus competitors and unlimited voice and apps could pressure incumbents’ ARPUs. It says build in 45 percent realisation decline for incumbents over the next two years. It adds that Bharti stock price reaction is over-done, valuations at trough. It has cut EBITDA estimates for Bharti by 2-10 percent and target to Rs 382 from Rs 421 per share. It says revised target price still offers 23 percent upside potential from current levels.
Goldman Sachs reiterates buy rating with 13 percent upside potential with an expectation that subscriber additions for Jio can surprise to the upside. It estimates 75 million subscribers for EBITDA to break-even by FY20
expect earnings and CROCI to increase materially in FY18.
Morgan Stanley stays overweight on Reliance with target price at Rs 1280 per share. It says Jio’s plans suggest that revenue will start from January 2017. It expects Jio to generate USD 2 billion revenue in FY18. It states PX, ROGC & ethane imports are on track for earnings in FY18 and thesis of strong free cash flow generation over FY18-20 is intact.
Disclaimer: Reliance Jio is a part of Reliance Industries that owns Network 18 Media & moneycontrol.com