DBS Group Research analyst Sachin Mittal has kept his “buy” call on Singapore Telecommunications(Singtel) with a higher target price of $4.58 from $4.40 previously, as he expects the market to reward the telco for improving its core business.

Over the next 12 months, Mittal expects Singtel’s core value to grow by 180% with growth in its data centre business, NCS and Australian subsidiary, Optus, expected to drive a core business net profit compound annual growth rate (CAGR) of 10% over FY2025 to FY2028.

The higher core net profit is underpinned by a projected core ebit growth of 9% over FY2025 to FY2028, supported by a 5% growth in Singapore’s ebit as well as a 15% growth in Optus’ ebit from FY2025 to FY2028.