Mumbai, June 6 (IANS). After downgrating the shares of Brokerase firm Motilal Oswal’s Bharti Hexacom to ‘Neutral’ rating and set a target price of Rs 1,900, its impact was shown on the company’s stock on Friday. During the intra-day trading on the National Stock Exchange (NSE), the shares of Bharti Hexacom saw a decline of more than 3.5 percent and came to Rs 1,810.
Brokerz says that the main reason for downgrating the rating is the high-level of the share, which is currently about 40 percent expensive than Bharti Airtel.
Brokerz said, “The risk-worker is no longer attractive; it has been neutralized by downgrade.”
Motilal Oswal believes that this makes the risk-reward profile less attractive for investors, even though the company continues to perform strong performance and development through premium services.
Brokeys hope that Bharti Hexacom will be date-free (except lease liabilities) by FY 2027.
Brokerz has also estimated that the company’s dividend will increase from Rs 10 per share in FY 2025 to Rs 30 per share by FY 2027.
The potential tariff hike in December 2025 is expected to increase the average revenue from Rs 242 to Rs 284 from Rs 242 to FY 2025 on the average revenue.
Brokerz hopes that after FY 2028, ARPU will grow at a slow rate of 5.5 percent annually, while the total revenue and EBITDA growth may remain around seven percent.
Motilal Oswal has also expressed some concerns. The operation of Bharti Hexacom is concentrated in some telecom circles, which may limit further growth.
In addition, the government still holds 15 percent stake in the company and is being seen as a risk factor.
Brokerz also reported that any potential corporate step such as stake sales could put pressure on the valuation of stock.
Brokering further warned that the potential merger with Bharti Airtel could be risky, especially if the current high-level of Bharti Hexacom makes the share swap ratio unfavorable.
Bharti Hexacom’s stock was trading at around Rs 1,820.30 at around 2:14 pm on Friday, which was around 3.10 percent or Rs 58.20. So far this year, the stock has increased by 24 percent and in the last 12 months, there has been a rise of 74 percent.
-IANS
SKT/Ekde
