Should you buy, sell or hold Bharti Airtel shares after Q3 profit, ARPU miss analysts' estimates

Bharti Airtel share price: The telecom major's stock was in focus on Dalal Street on Wednesday, a day after the company reported a net profit and average revenue per user (ARPU) that fell short of analysts' estimates.

Bharti Airtel reported a 91.4 per cent jump in net profit to Rs 1,588.2 crore for the quarter ended December 2022 compared with the year-ago period. | Image: Reuters

Bharti Airtel shares faced selling pressure on Wednesday, a day after the telecom major reported a net profit and average revenue per user (ARPU) that fell short of analysts' estimates. The Bharti Airtel stock declined by as much as Rs 18.4 or 2.3 per cent to Rs 767 apiece on BSE.

Bharti Airtel Q3 results

After market hours on Tuesday, Bharti Airtel — led by billionaire Sunil Bharti Mittal — reported a 91.4 per cent year-on-year jump in net profit to Rs 1,588.2 crore for the quarter ended December 2022, growth of 19.9 per cent in revenue to Rs 35,804.4 crore and a rise of Rs 30 in its mobile ARPU improved by Rs 30 to Rs 193. ARPU is a key metric that determines the amount of money a telecom company makes from each of its subscribers.

Both profit and ARPU fell short of analysts' estimates. According to Zee Business research, Bharti Airtel's quarterly net profit was estimated at Rs 2,900 crore, revenue at Rs 35,100 crore and ARPU at Rs 195.

Bharti Airtel MD Gopal Vittal said the company is on track with its 5G rollout to cover all towns and key rural areas by March 2024.

What brokerages recommend on Bharti Airtel after the telecom major's Q3 results

Brokerage	Rating	Target	Upside/downside
Goldman Sachs	Buy	Reduced to Rs 875 from Rs 880	+11.4%
Credit Suisse	Outperform	Rs 950	+21%
CLSA	Buy	Reduced to Rs 1,015 from Rs 1,040	+29.2%
Morgan Stanley	Overweight	Rs 860	+9.5%
JPMorgan	Underweight	Reduced to Rs 700 from Rs 710	-10.9%
Macquarie	Outperform	Rs 833	+6.1%

CLSA raised its earnings forecasts for Bharti Airtel for 2024 and 2025 by three and nine per cent respectively. The brokerage retained a 'buy' call on the stock but reduced its target price by Rs 25 to Rs 1,015.

Bharti Airtel shares past performance

The Bharti Airtel stock underperformed the overall market with a gain of 0.9 per cent in the quarter ended December 2022, a period in which headline indices Sensex and Nifty50 rose 5.9 per cent each.