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

Bharti Airtel emerged as the top telecom pick from Jefferies, backed by strong data subscriber growth and market share gains despite the tariff hike. Reliance Jio’s recovery in 4G/5G additions has earned Reliance Industries a “buy” rating, while brokerages expect continued subscriber losses to Vodafone Idea to further strengthen Airtel and Jio’s market position.

Shares of Bharti Airtel rose 0.8% on the BSE on Thursday to Rs. 1,645, extending an impressive run of 45% over the past year and 11% over the past six months. Jefferies priced the stock at Rs. A target price of 2,040 has been set, 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 take advantage of future growth opportunities.

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

Meanwhile, Vodafone Idea continues to struggle. On Thursday, its share price was Rs. Despite rising 3.8% to 9.87, the stock is down 36% in 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 customer retention challenges in 17 of its 22 operating circles.

The broader telecom sector saw a net loss of 6.1 million active subscribers in November, driven by continued churn reflected in SIM consolidation and 13 million mobile number portability (MNP) requests. However, the 4G/5G subscriber base grew by 7 million during the month, led by Jio and Airtel, indicating consumer acceptance of tariff normalization and growing demand for data services, Jefferies noted.

Jefferies said it expects Bharti Airtel and Reliance Jio to continue consolidating 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 a loss of market share and intense competition.

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