Telecom giant Bharti Airtel has been facing a difficult year on stock exchanges as each coming day Reliance Jio strengthened its subscriber base. Today, the share price of Airtel ended on a muted level at Rs 336.70 per piece on BSE up by 0.93%. The company has not been performing well and has not been a very good choice for investors. In a year, the share price of Airtel has plunged by nearly 50% on BSE. It had touched an all-time high of Rs 547.20 per piece in December 2017, however, since then it has dropped so much that it has touched an all-time low of Rs 277 per piece by end of October, 2018. But considering stock exchanges are very volatile and sentiment driven, the secret of earning good returns on investment is when every thing is bleak in a stock. So, guess what! Market experts are quite optimistic about Airtel share price, so much so, that they have even given Buy call with a prediction that it will soar by 53%. 

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After attending Airtel analysts meet, Elara Capital felt that the key message was that while India wireless ARPU should go up (and management believes strongly it has bottomed out), there are other drivers for Bharti Airtel’s India revenue to improve.

These include: 1) content tie-ups that could drive revenue sharing from subscription and advertising (with the added benefit of potentially reducing churn); 2) Airtel’s payment bank which has got a new leader and has done a successful pilot with an NBFC for handset financing using proprietary data to create a score analogous to a credit rating; 3) Adding more services to Airtel’s B2B services that currently include connectivity and data center services and 4) Rapid expansion for Airtel DTH and focused expansion for Airtel broadband. 

The following two years, Airtel's management thinks, will be heavy capex years for India wireless (INR194.7bn in FY18 and INR128.2bn in 1HFY19) - capex is likely to moderate given that it has installed ~200K 4G base stations over last 2 years and also ensured that in the metros and the top-100 towns their 4G towers are at most one hop away from a fibre connection. 

In Elara Capital's view, while some of the moves such as the launch of a converged set-top-box and bundling content for subscribers seems similar to that done/ announced by Jio, there are some key differences as well. Airtel intends to follow a laddering strategy for content instead of a one-size-fits-all like Jio. 

Similarly, analysts at Elara added, "while Airtel also seems to stress on the potential for home broadband to reduce churn, it is clear that they want to go after the mass market not by broadband, but by using a bundle strategy with Airtel DTH and restricting the broadband expansion to a few focus geographies."

Considering the above, Elara said, "We reiterate that Airtel’s new strategy of minimum ARPU is strongly positive and will also help correct the traffic asymmetry – critical with the looming Jan-2020 interconnect usage charge (IUC) cut to zero."

"Medium-term capex intensity for the overall sector is expected to moderate given India’s shift to a three-player market that changes the spectrum vs network capex tradeoff in favor of higher spectrum purchases (as lower competitive intensity can be expected for spectrum bids)," added Elara. 

Following which, Elara Capital has reiterated Buy with an unchanged TP of INR 510 on 6.0x (unchanged) FY21E EV/EBITDA adjusted for minority holding in Bharti Infratel.

If we look at the Elara Capital's target price, then Bharti Airtel is set to give a massive 53% return to its investors in coming months ahead.