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CHANGE
Retain our positive view - improving outlook ex forex one-off
Bharti is amongst the fastest growing large telecom service providers.
Competitive intensity in India is declining and Bharti’s move of raising
tariffs has been replicated by most large operators. We think it is best
positioned to benefit from data growth in India. Bharti is gaining revenue
market share in Africa with significant room for margin expansion.
CATALYST
EPS likely to double in 2 years driven by multiple growth engines
We expect strong improvement in profitability for Bharti over the next
two years on the back of tariff increase driven revenue growth,
contribution from 3G data in India and cost rationalization driven margin
improvement in Africa. Regulatory clarity, higher than expected Africa
margin, Indus tower monetization could be other potential catalysts.
VALUATION
Raise TP; Decline on forex movement provides an opportunity
We are raising our FY13 estimates and TP for Bharti. We are raising our
TP to INR470 (INR464 for India and INR6 for Africa) from INR440 on the
back of estimate increases. Our DCF based TP works out to 7.5x FY13E
EV/EBITDA, 16.3x FY13E EPS. Risk to our TP is resurgence of competitive
intensity and adverse regulatory decision on spectrum.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Powered by multiple engines
CHANGE
Retain our positive view - improving outlook ex forex one-off
Bharti is amongst the fastest growing large telecom service providers.
Competitive intensity in India is declining and Bharti’s move of raising
tariffs has been replicated by most large operators. We think it is best
positioned to benefit from data growth in India. Bharti is gaining revenue
market share in Africa with significant room for margin expansion.
CATALYST
EPS likely to double in 2 years driven by multiple growth engines
We expect strong improvement in profitability for Bharti over the next
two years on the back of tariff increase driven revenue growth,
contribution from 3G data in India and cost rationalization driven margin
improvement in Africa. Regulatory clarity, higher than expected Africa
margin, Indus tower monetization could be other potential catalysts.
VALUATION
Raise TP; Decline on forex movement provides an opportunity
We are raising our FY13 estimates and TP for Bharti. We are raising our
TP to INR470 (INR464 for India and INR6 for Africa) from INR440 on the
back of estimate increases. Our DCF based TP works out to 7.5x FY13E
EV/EBITDA, 16.3x FY13E EPS. Risk to our TP is resurgence of competitive
intensity and adverse regulatory decision on spectrum.
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