Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Bharti Airtel Limited Overweight
BRTI.BO, BHARTI IN
1Q FY12 wrap: Net income estimates lowered but
positive developments expected
Bharti's 1Q results highlighted solid operational performance with only a
marginal decline in India wireless ARPM and a ~10% growth in Africa
volumes. We are encouraged by management’s comments of increased pricing
across all but 3-4 circles in India and have increased our revenue and EBITDA
forecasts. However higher tax and interest expenses lead to us reducing our
FY12/FY13 EPS estimates by 9%/1.2%. Bharti remains our preferred name –
it is less exposed to regulatory risks, has better exposure to the data
opportunity in the next 2-3 years, and its African business should improve.
Solid operational results: Bharti’s India wireless revenue and EBITDA
were in line with expectations. Volumes grew 4.6% Q/Q while ARPM
declined by only 0.3paisa. Wireless margins improved 60bp Q/Q. Bharti
confirmed increasing tariffs in 18-19 circles (to varying degrees) and stated
that it can change tariffs in the remaining circles too.
Africa trends encouraging: Bharti Africa delivered solid 6% revenue
growth driven by 9.5% minute growth while margins expanded 40bp. We
note that ARPU increased 1.4% to $7.3. Management expects a stable
pricing environment and margins to improve as the year progresses. We
forecast 29.0%/33.2% margins for FY12/FY13.
Tax and interest drive bottom-line miss: Net interest expenses increased
25% Q/Q while the effective tax rate was ~30% vs. 27% in 4Q. This drove
the 13%/18% net income miss vs. JPMe/cons even though EBITDA was inline
with expectations.
Forecast changes: We factor in a higher tax rate and increase our interest
expense estimates. As a result, our FY12/FY13 EPS estimates are now
9%/1.2% lower at Rs18.3/Rs31.3. Our FY12/FY13 revenue and EBITDA
margin estimates are higher, driven by the better ARPM in 1Q.
Maintain Overweight, with revised PT of Rs480: Our Mar-12 price target
is now Rs480 (vs Rs485 earlier). Key risks: tariff increase being reversed,
slowing volumes in India, delays in regulatory clarity, and a slowdown in
Africa momentum.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Bharti Airtel Limited Overweight
BRTI.BO, BHARTI IN
1Q FY12 wrap: Net income estimates lowered but
positive developments expected
Bharti's 1Q results highlighted solid operational performance with only a
marginal decline in India wireless ARPM and a ~10% growth in Africa
volumes. We are encouraged by management’s comments of increased pricing
across all but 3-4 circles in India and have increased our revenue and EBITDA
forecasts. However higher tax and interest expenses lead to us reducing our
FY12/FY13 EPS estimates by 9%/1.2%. Bharti remains our preferred name –
it is less exposed to regulatory risks, has better exposure to the data
opportunity in the next 2-3 years, and its African business should improve.
Solid operational results: Bharti’s India wireless revenue and EBITDA
were in line with expectations. Volumes grew 4.6% Q/Q while ARPM
declined by only 0.3paisa. Wireless margins improved 60bp Q/Q. Bharti
confirmed increasing tariffs in 18-19 circles (to varying degrees) and stated
that it can change tariffs in the remaining circles too.
Africa trends encouraging: Bharti Africa delivered solid 6% revenue
growth driven by 9.5% minute growth while margins expanded 40bp. We
note that ARPU increased 1.4% to $7.3. Management expects a stable
pricing environment and margins to improve as the year progresses. We
forecast 29.0%/33.2% margins for FY12/FY13.
Tax and interest drive bottom-line miss: Net interest expenses increased
25% Q/Q while the effective tax rate was ~30% vs. 27% in 4Q. This drove
the 13%/18% net income miss vs. JPMe/cons even though EBITDA was inline
with expectations.
Forecast changes: We factor in a higher tax rate and increase our interest
expense estimates. As a result, our FY12/FY13 EPS estimates are now
9%/1.2% lower at Rs18.3/Rs31.3. Our FY12/FY13 revenue and EBITDA
margin estimates are higher, driven by the better ARPM in 1Q.
Maintain Overweight, with revised PT of Rs480: Our Mar-12 price target
is now Rs480 (vs Rs485 earlier). Key risks: tariff increase being reversed,
slowing volumes in India, delays in regulatory clarity, and a slowdown in
Africa momentum.
No comments:
Post a Comment