The upbeat assessment from brokerage firm Jefferies, highlighting Bharti Hexacom's robust growth potential and impressive profit margins, triggered a significant surge in the company's share price, soaring by over 10%.
Shares of Bharti Hexacom experienced a notable uptick on Tuesday after Jefferies assigned it a 'buy' rating alongside a price target of Rs 1,080.
Jefferies' optimistic outlook, underscored by the company's promising growth prospects and sound financial performance, catalyzed a sharp uptick in the share price, with Bharti Hexacom trading at Rs 889.30 on the NSE as of 2:58 PM.
The price target set by Jefferies implies a potential upside of nearly 34% from current levels, positioning it as one of the most bullish forecasts among analysts covering the stock.
Bharti Hexacom shares commenced trading at Rs 755 on the National Stock Exchange (NSE), surpassing market expectations. Similarly, on the Bombay Stock Exchange (BSE), the opening price stood at Rs 755.20, reflecting a notable gain of 32.49%.
Investors who participated in Bharti Hexacom's IPO stand to potentially reap substantial rewards, with Jefferies' target suggesting significant gains from the issue price of Rs 570 if they maintain their holdings for a year.
Jefferies projects a robust growth trajectory for Bharti Hexacom, forecasting a 16% annual increase in revenue and a 21% rise in EBITDA from FY24 to FY27. This anticipated growth, coupled with prudent capital expenditure management, is expected to fuel a 40% annual growth rate in free cash flow.
Furthermore, Jefferies foresees Bharti Hexacom's strong cash generation facilitating debt reduction initiatives, potentially leading to a reduction in the net debt-to-EBITDA ratio to 0.4 times by FY27. This could also pave the way for enhanced dividend payouts to shareholders.
JM Financial, another brokerage firm, had previously initiated coverage on Bharti Hexacom with a 'buy' rating and a price target of Rs 790. They view Bharti Hexacom as a midcap company well-positioned to capitalize on the structural growth dynamics of wireless ARPU in the Indian telecom sector.
