After falling for five consecutive trading sessions, shares in Bharti Airtel reversed track and made rapid gains on Thursday, rising as much as 8 per cent.
At 1 p.m., the stock traded at Rs 302.50, up 21.35 points, or 7.59 per cent, on the Bombay Stock Exchange. It has touched a high of Rs 303.50 and a low of Rs 283.60 in trade so far.
On Tuesday, Bharti Airtel chairman Sunil Mittal was made an accused in a case over alleged corruption in allocating mobile phone bandwidth more than a decade ago, but brokerages said on Wednesday said the stock remains a good buy.
"Prima facie, we do not see a material impact on Bharti and maintain our positive view as pricing is likely to move up in the coming quarter," said UBS. The brokerage said the stock is a 'buy' with a target price of Rs 425.
Morgan Stanley continues to be 'overweight' on the stock with a target price of Rs 386.
"We believe the share price will rise relative to the country index over the next 60 days," it said, adding that the "stock has traded off recently making short-term valuation much more compelling".
Mr Mittal has been summoned to a Delhi court on April 11, along with Asim Ghosh, the former head of Vodafone-Essar, and Ravi Ruia, one of the founders of Essar Group. Former telecom secretary Shyamal Ghosh has also been ordered to appear in court on the same day.
"We would like to reiterate that Bharti Airtel and its promoters have always practised the highest standards of corporate governance and accordingly view the charge sheet as an attempt to tarnish its high reputation. We are disappointed with the charge sheet against a company which is one of the few Indian MNCs (multinational companies), with a reputation for good governance standards," Bharti said in a statement.
CLSA has an 'underperform' on the stock with a target price of Rs.315.
"Bharti Airtel is in no man's land for now and can head to Rs.270 if spectrum re-farming is implemented, and that would be the ideal entry price," the brokerage said.
Singapore-based telecom firm SingTel, which holds over a 30 per cent stake in Bharti Airtel, on Wednesday said it has full faith in the company's corporate governance standards under the leadership of Mr Mittal.
"We are confident that Bharti Airtel and Mr Mittal have always upheld and practised the highest standards of corporate governance in all aspects of the company's operations, including the acquisition of spectrum. We trust that due legal process in India will prevail and are confident that Bharti Airtel and Mr Mittal will be vindicated before the courts," the Singapore-based company said in a statement.
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