Jefferies bets on Bharti Airtel as top telecom pick, sees Jio’s recovery driving growth

Bharti Airtel has emerged as the top telecom pick from Jefferies, supported by robust data subscriber growth and market share gains despite tariff hikes. Reliance Jio’s recovery in 4G/5G additions earned Reliance Industries a “buy” rating, while the brokerage anticipates Vodafone Idea’s persistent subscriber losses to further strengthen Airtel and Jio’s market positions.

Shares of Bharti Airtel advanced 0.8% on Thursday to close to Rs 1,645 on the BSE, extending its impressive run with a 45% increase over the past year and an 11% rise in the past six months. Jefferies has set a target price of Rs 2,040 for the stock, indicating a potential upside of 24%.

The brokerage emphasized Airtel’s continued leadership in the wireless broadband market, with a net addition of 2 million subscribers in November 2024, positioning it to capitalize on future growth opportunities.

Reliance Industries, rated “buy” with a target price of Rs 1,660, offers a potential upside of over 30% from current levels. Reliance Jio added 5.1 million 4G/5G subscribers in November, recovering from a 17-million-subscriber loss following tariff hikes earlier in the year. Jio’s ability to regain market share—up 20 basis points in wireless broadband—reinforces its position as the sector leader and a key driver of Reliance’s telecom ambitions, the brokerage said.

Meanwhile, Vodafone Idea continues to struggle. Despite a 3.8% rise in its share price on Thursday to Rs 9.87, the stock has slumped 36% over the past year and 40% in six months. Jefferies noted that Vodafone Idea lost 1.9 million active subscribers in November—its twelfth consecutive month of decline—reflecting challenges in retaining customers across 17 of its 22 operating circles.

The broader telecom sector saw a net loss of 6.1 million active subscribers in November, driven by sim consolidation and sustained churn reflected in 13 million Mobile Number Portability (MNP) requests. However, the 4G/5G subscriber base surged by 7 million during the month, led by Jio and Airtel, signaling consumer acceptance of tariff normalization and growing demand for data services, Jefferies noted.Jefferies said it expects Bharti Airtel and Reliance Jio will continue to consolidate their market positions, leveraging their strong operational performance and investments in high-value segments. Meanwhile, Vodafone Idea faces an uphill battle as it grapples with market share losses and intensified competition.Also read | Can HUL shares fall below Rs 2,000? Check target prices after muted Q3 print

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