India's Bharti Hexacom slips as Jefferies downgrades to 'hold'

Bharti Hexacom

27/06/2024 10:33

** Bharti Airtel's  BRTI.NS  unit Bharti Hexacom shares
 BHAX.NS  down 5%
    ** Brokerage Jefferies said they downgraded rating on Bharti
Hexacom to "Hold" from "Buy", as the telecom operator's higher
valuations limits upside
    ** BHAX shares more than doubled since IPO in April
    ** While BHAX's stronger growth, higher ROCE, better FCF
conversion compared to BRTI warrant a premium, its higher
revenue concentration, related-party transactions should keep
its valuation premium in check - Jefferies
    ** Cuts earnings estimates of BHAX by 4% over FY24-27 to
factor in unexpected spectrum purchases worth $120 million, but
raises PT to 1,290 rupees - Jefferies
    ** Selective bidding by telcos in auctions suggest operators
want to monetize existing investments before going for fresh
capex - Jefferies
    ** Remains positive on sector as tariff hikes, other
factors, would support ARPU growth in near term - Centrum
    ** Shares in Bharti Airtel and Vodafone Idea  VODA.NS  both
trading flat
    

($1 = 83.4390 Indian rupees)

 (Reporting by Aleef Jahan in Bengaluru)
 ((aleefjahan.cs@thomsonreuters.com))