Stocks to BUY: In the year 2022, there is going to be a lot of movement in the Bharti Telecom sector. These include traffic hikes, expansion of 4G service and 5G auctions after spectrum price cuts will be major developments. Brokerage firm CLSA has said in its report that this year, increasing the scope of digital services, decreasing price competition and increasing ARUP (average revenue per user) will be new trends for the telecom sector. CLSA says that in terms of investment themes, it is advisable to invest in Bharti Airtel, Indus Tower, Tata Communications, Indus Tower, Sterlite Tech. Investors can get strong returns of up to 38 per cent in these stocks.
Growth will come from these 4 factors
CLSA says that 2022 will be the ‘Year of 5G’ for the industry. This year, a hike in tariff rates, an increase in 4G subscribers, mobile data and revenue growth will boost the sector. According to the report, 46-60 per cent are 4G subscribers. At the same time, 4G penetration will reach 83 per cent by FY24CL. Talking about revenue growth, during FY21-24CL, it can be around 13% CAGR.
Challenge in 5G Auction
CLSA says that in 2022 there will be a big stir in the telecom sector regarding 5G. After the spectrum auction, many companies are preparing to start 5G service. However, one of the biggest challenges regarding 5G is the high prices of the 5G spectrum.
New trends and big events in the telecom sector
CLSA says that increasing ARPU, declining price-wise and increasing growth of digital services, especially apps and partnerships will be the new trends of this year. On the other hand, if we talk about big events, then there will be final clarity on AGR dues, 5G spectrum auctions, possible RJio IPO of Reliance Jio and possible stake sale in Indus Towers.
Up to 40% returns in these stocks
Bharti Airtel: CLSA says that when it comes to the investment themes of the sector, it has the advice to buy on Bharti Airtel. The brokerage has increased the target price from Rs 863 to Rs 910 per share. The current price of the share is Rs 705.40. In this way, investors can get a return of about 29 per cent from the current price.
Vodafone Idea: Foreign brokerage has maintained an ‘underperform’ rating on Vodafone Idea. However, the target price of the stock has been increased from Rs 11 to Rs 16. The current price of Vodafone Idea share is Rs 15.10.
Indus Tower: CLSA has given BUY on Indus Tower stock. The target price of the share has been increased from Rs 340 to Rs 360. With the current price (Rs 261.50), investors can get a strong return of about 38 per cent.
Tata Communications: The brokerage firm has retained the ‘Outperform’ rating on Tata Communications Limited. The target price of the stock has been increased from Rs 1,570 to Rs 1,660. With the current price (Rs 1,467), investors can get a further profit of about 13 per cent in the stock.
Sterlite Tech: CLSA has advised buying (BUY on Sterlite Technologies) on Sterlite Technology. However, the target price of the stock has been reduced from Rs 393 to Rs 363. Due to a reduction in earnings estimates, the brokerage has reduced the target price. With the current price (Rs 274.50), investors can earn strong earnings of about 32 per cent going forward.