Bharti Hexacom shares jump 9% as stock enters good books of Jefferies

Over FY24-27, the company is expected to deliver 16%/21% CAGR in revenue/EBITDA, Jefferies said, adding that strong cash generation should drive deleveraging of Rs 5,500 crore and reduce net debt to EBITDA ratio to 0.4x by FY27.

Last Friday, the stock had listed on stock exchanges at Rs 755, a premium of 32.45% over its IPO issue price. BHL provides consumer wireless (mobile), fixed-line and broadband services in Rajasthan and North East (NE) circles under Bharti's brand Airtel. The Rajasthan circle constitutes ~78% of its revenue and North East (NE) circle accounts for the rest.

Also read |

JM Financial had also recently initiated coverage on the stock with a target price of Rs 790 but said the stock could potentially double in 3-4 years on the back of 15-17% EBITDA compounding story. The brokerage sees BHL as a midcap pure-play on wireless ARPU growth story vis-à-vis Bharti (which sees 25-30% of its value coming from other than India wireless business).

"We expect BHL’s FY24-26/FY24-30 EBITDA CAGR to be higher at 17%/15% (vs. 15%/12% for Bharti’s India wireless business) due to ~2% subs CAGR and ~10% ARPU CAGR potential as Rajasthan/NE circle has relatively lower teledensity and lower penetration of high ARPU post-paid & data subs," JM Financial said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)