Macquarie turns bullish on Indian telecom sector: Bharti Airtel, Hexacom top picks

Macquarie Research has upgraded its outlook for the Indian telecom sector, citing an improved manufacture outlook, imaginable tariff hikes, and amended currency travel visibility. The brokerage steadfast highlighted Bharti Airtel, Bharti Hexacom, and Reliance Industries arsenic its apical picks successful the sector.

Key banal recommendations

• Bharti Airtel: Macquarie reaffirmed an Outperform standing with a terms people of Rs 1,710, driven by anticipated operating leverage and continued de-leveraging.

• Bharti Hexacom: The banal besides secured an Outperform rating, with a people terms of Rs 1,450.

• Reliance Industries: Assigned a Neutral rating, Macquarie acceptable a people of Rs 1,300, pointing to mean expectations successful its telecom operations.

Upgrades for Indus Towers and Vodafone Idea

• Indus Towers: Upgraded from Underperform to Neutral with a revised terms people of Rs 310. Macquarie noted that the caller 30 per cent diminution successful the banal implicit the past 3 months presents an charismatic valuation.

• Vodafone Idea: The standing was lifted from Underperform to Neutral, with a people terms of Rs 7, supported by hopes of industry-wide tariff revisions and sentiment recovery.

Sector drivers

1. Tariff hikes: The expected summation successful tariffs crossed the telecom manufacture is apt to boost net maturation and heighten currency travel for large players.

2. Jio demerger: Reliance Jio’s separation from its genitor institution is anticipated to amended capitalist sentiment and absorption connected telecom-specific operations.

3. Operational efficiency: Bharti Airtel, successful particular, is projected to payment from its operating leverage and ongoing efforts to trim debt.

Outlook

The Indian telecom assemblage appears poised for a rebound, underpinned by improving manufacture dynamics and charismatic valuations. Macquarie's bullish stance reflects optimism astir tariff hikes and structural changes that could thrust semipermanent maturation successful the sector.