CLSA Maintains Outperform Rating on Bharti Airtel with Revised Target Price
Global brokerage firm CLSA has reaffirmed its outperform rating on Bharti Airtel, with the target price adjusted marginally upward to Rs 2,320 from the previous Rs 2,310. This positive outlook comes as the telecommunications giant accelerates its strategic investments in the data center sector.
Bharti Airtel's Nxtra Data Center Expansion
Analysts highlight that Bharti Airtel is significantly boosting investments in its data center subsidiary, Nxtra Data, with plans to inject up to $1 billion. This substantial capital infusion aims to expand Nxtra's capacity dramatically from the current 300MW to an impressive 1GW, targeting a commanding 25% market share in India's burgeoning data center landscape.
Bharti Airtel will retain a controlling stake following this deal, which values Nxtra at approximately $3.1 billion. Nxtra operates a robust co-location business supported by a pan-India network comprising 14 large data centers and over 120 edge data centers, ensuring widespread coverage and reliability.
Financially, Nxtra reported strong performance for FY25, with revenue reaching Rs 2,080 crore and earnings before interest, taxes, depreciation, and amortisation (EBITDA) at Rs 790 crore. The subsidiary's net profit stood at Rs 220 crore, underscoring its profitability and growth trajectory.
Morgan Stanley Bullish on Jubilant Foodworks Post-Dunkin Exit
In other market developments, Morgan Stanley has assigned an overweight rating to Jubilant Foodworks, setting a target price of Rs 690. This optimistic stance follows the company's strategic decision to not renew the franchise agreement for the Dunkin brand.
Analysts noted that Dunkin's operations contributed a mere 0.6% of total revenues and were consistently loss-making. Consequently, the closure of this segment is expected to have no material financial impact on the company. The move has been viewed positively, as it allows management to concentrate on scaling the core Domino's brand and selectively introducing new brands like Popeyes, enhancing long-term growth prospects.
Jefferies Endorses Indigo with New CEO Appointment
Jefferies has issued a buy rating for Interglobe Aviation (Indigo), with a target price of Rs 6,150. This endorsement comes as Indigo appoints Willie Walsh as its new CEO, effective early August, following his tenure at the International Air Transport Association (IATA).
Walsh brings over 40 years of aviation experience, including leadership roles at British Airways during critical periods, providing global expertise that aligns with Indigo's current growth phase, operational stabilization, and international expansion plans. His appointment, coming just three weeks after Pieter Elbers' resignation, ensures minimal leadership disruption.
Looking ahead, key priorities for Indigo include enhancing operational reliability, addressing crew-related issues, and balancing its low-cost model amidst recent cost headwinds, positioning the airline for sustained success in a competitive market.
Nomura and Investec Highlight Opportunities in Healthcare and Travel Tech
Nomura has given a buy rating to Nephrocare Health Services, with a target price of Rs 605. Analysts emphasize that the company's dialysis services are both sticky and scalable, operating in a market dominated by few players. NephroPlus is well-positioned to capitalize on growth opportunities in emerging markets, offering a single-specialty healthcare service with significant recurring-revenue potential.
Investec has also issued a buy rating for RateGain Travel, setting a target price of Rs 775. RateGain is described as a differentiated travel-tech platform that provides Data-as-a-Service (DaaS), distribution, and marketing technology solutions to hotels, online travel agencies (OTAs), and destination marketing organizations to maximize revenue.
Three key strengths stand out for RateGain:
- Its integrated capability stack is unmatched in the industry.
- The potential impact from AI-led disruption on its business is minimal.
- The company must execute swiftly to maintain its competitive moat and strategic advantage.
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