Shares of Bharti Airtel rose 2% after Supreme Court will hear pleas for Bharti Airtel and Vodafone Idea in the case involving dues related to adjusted gross revenue (AGR). Brokerage firm Bernstein also maintained a bullish call on the stocks and raised the target price for Airtel. 

What Happened: A three judge Supreme Court bench, led by Chief Justice DY Chandrachud, will hear the curative petitions filed by Bharti Airtel and Vodafone Idea on the AGR case at 1.30 pm.

The petitions asked the court to reconsider its 2019 judgement which was made in favour of Department of Telecommunication’s (DoT) asking for AGR and other non-revenue related dues. Telecoms argued that the DoT made an error while calculating the AGR dues and imposed arbitrary penalty amounts.

The Supreme Court in a September 2020 order had asked the telecoms to pay ADR dues over a 10-year time period. According to DoT’s estimates, Airtel owed ₹43,980 crore in AGR dues, while the company itself pegs the number at ₹13,004 crore. For Vodafone Idea, the DoT calculated dues amounted to ₹58,254 crore, nearly three times the firm’s own estimates of ₹21,533 crore.

See Also: Bharti Hexacom Races 5% After Citi Initiates Coverage With ‘Buy’ Rating

Brokerage Views: Bernstein maintained "outperform" call and hiked the target price to ₹1,740 from ₹1,600. The brokerage sees the tariff hikes driving average revenue per user (ARPU) will improve the return ratios and reinforce the brokerage's industry repair thesis. 

The telecom has a favourable market structure led by consolidation over the years, the brokerage firm said. The long-term risk reward remains attractive in a consolidating market structure with a revenue and earnings upgrade cycle, the research firm added. 

Bharti Airtel has continued to gain market share with 37% right now and Reliance Jio at 45%. The brokerage expects further consolidation with Vodafone Idea’s subscriber churn staying high. 

In the latest data of Telecom Regulatory Authority of India (TRAI), Bharti Airtel added 12.52 lakh subscribers in June while Vodafone Idea lost 8.60 lakh consumers at the same period.

Price Action: Shares of Bharti Airtel rose 2.71% intraday to all time high of ₹1,608.40 on Friday. 

Read Next: RVNL Shares Reclaim ₹600 Levels As Company Bags ₹203 Cr Order