Telecom stocks are in focus after the recent tariff hikes and Bharti Airtel has been a breakout stock. The share price of Bharti is up over 7% so far in 2025. Jefferies in its recent report has identified the stock as its preferred way to play the ongoing tariff improvement in India. Bharti’s aggregate revenue growth accelerated to 16% YoY, aided by tariff hikes. Jefferies has put a Buy on the stock with a target price of Rs 2,030/share, implying upside of 18% from current levels.
Here are 4 reasons why Jefferies is recommending Buy on Bharti Jefferies on Bharti Airtel: Benefited the most from tariff hikes
During Q3FY25, the aggregate revenues for the top 3 operators grew 16% YoY/4% QoQ, aided by tariff hikes taken in last July. Among operators, Jefferies highlighted that , “Bharti Hexacom grew the fastest (7.3% QoQ), followed by Bharti Airtel (+5.8% QoQ) followed by Jio (+3.4% QoQ) and VIL (+1.7%).” After the tariff hikes, the brokerage house pointed out that “Bharti Airtel and Hexacom have seen the highest revenue accretion of 17% compared to the Q1 levels, much higher than VIL and Reliance Jio’s cumulative revenue accretion of 6-11%.”
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The growing data and voice usage since tariff hikes “suggests acceptance of tariff hikes and limited down-trading in the sector,” added Jefferies. They pointed out that the decline in SG&A costs in Q3FY25 was one of key contributors to the margin expansion besides strong revenue growth. According to them, the “Market share shift towards Bharti continues – In Q3, Bharti gained 55bps revenue market share while Jio/VIL lost 40bps/10bps. VIL has now lost revenue market share for the 9th straight quarter from 18.0% in Q2FY23 to 14.2% in 3QFY25.” This is a positive for Bharti and besides “an acceleration in its subscriber loss, VIL’s quality of subscriber base is also deteriorating at the margin, evident from a decline in average data usage per subscriber and limited ARPU uplift post tariff hikes,” they added.
Jefferies on Bharti Airtel: Gain in market share
According to Jefferies, “Vodafone Idea’s subscriber loss and worsening subscriber mix bodes well for further market share gains for Bharti/Jio.
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