Vodafone Idea shares: IIFL Securities ups target price for VIL, says this on Bharti Airtel, Jio
Vodafone Idea shares: IIFL Securities ups target price for VIL, says this on Bharti Airtel, Jio
Vodafone Idea Ltd (VIL) and Bharti Airtel Ltd have announced tariff hikes following the latest move by Reliance Jio Infocomm. The next round of tariff hikes by telecom operators could come as early as late 2025 and that the next event to watch out for is the outcome on the AGR curative petition, IIFL Securities said it raised target price for Bharti Airtel, Vodafone Idea and Indus Towers and embedded value for JIO.
IIFL Securities noted Vodafone Idea and Bharti Airtel took 13-21 per cent tariff increases on their most popular prepaid plans. Against this, the magnitude of tariff hikes by Reliance Jio was higher than peers with the popular prepaid plans seeing 19-25 per cent increases.
While RJio initiated tariff hike this time, it had been Bharti Airtel in the past that historically initiated price hikes.
"All three telcos also took 15 per cent post-paid price hikes. For Bharti Airtel and VIL, the price hike is thus, on their entire mobile revenue. We estimate that JIO Phone and Bharat Phone account for 10 per cent of JIO’s mobile revenue and thus, JIO’s price increase would be applicable on 90 per cent of its mobile revenue base," IIFL said.
On a blended basis, the magnitude of tariff hikes by all telcos comes to 17 per cent. Considering some down-trading and SIM consolidation -- albeit lower than what was seen in previous tariff hikes, considering a fair degree of SIM consolidation that has already happened -- IIFL Securities estimates 14-15 per cent revenue boost from these tariff hikes.
IIFL Securities built in the payouts from the recently concluded spectrum auctions. It raised its target multiples for all the three companies.
It has a price target of 1,597 for Bharti Airtel, Rs 19 for Vodafone Idea and Rs 411 for Indus Towers. IIFL estimate JIO EV at $ 113 billion
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