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Bharti continues to lead the domestic telecom market in terms of both the subscriber base (21% market share)
and the revenue market share (32.3%).
In the last two quarters the subscriber addition for the industry has moderated with the return of rationality
and players shifting focus to revenue earning customers. Thus despite a fall in the subscriber net additions,
the overall revenue of the industry grew by 6% sequentially in the June 2011 quarter with Bharti gaining
market share by 50-basis-point.
On the back of its improving market share, Bharti has hiked its on-net tariff by 20%, reflecting the return of
pricing power. This was followed by tariff hikes by the other GSM players. We view this development as a
positive one for the industry specially for the incumbent players like Bharti. The benefits of the same are
likely to be reflected in the company’s financials by the end of FY2012 and starting FY2013.
An improving domestic 2G environment, a favorable regulatory regime, (New Draft Telecom policy, TRAI’s new
set of recommendations on relaxation of M&A norms coupled with share spectrum sharing) are developments
in favour of Bharti. Also, visible volume and margin progress on the acquired African operations, and a strong
data opportunity in the form of 3G adoption awaiting in the wings coupled with the stock’s attractive valuation
keep us bullish.
The stock trades at a trailing EV/EBITDA of 10.0x, which appears attractive in view of the 21.7% EBITDA CAGR
over FY2011-13E. The implied EV/EBITDA-to-growth is ~0.52x which compares favourably with the average of
0.64x for the leading emerging market telecom companies (including China Mobile, Telecom, Indosat, Idea
Cellular and Bharti). Thus we maintain a Buy on Bharti valuing it at an EV/EBITDA of 8x. This leads to a price
target of Rs468.
See entire list of 10 companies and details: click link below:
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Bharti continues to lead the domestic telecom market in terms of both the subscriber base (21% market share)
and the revenue market share (32.3%).
In the last two quarters the subscriber addition for the industry has moderated with the return of rationality
and players shifting focus to revenue earning customers. Thus despite a fall in the subscriber net additions,
the overall revenue of the industry grew by 6% sequentially in the June 2011 quarter with Bharti gaining
market share by 50-basis-point.
On the back of its improving market share, Bharti has hiked its on-net tariff by 20%, reflecting the return of
pricing power. This was followed by tariff hikes by the other GSM players. We view this development as a
positive one for the industry specially for the incumbent players like Bharti. The benefits of the same are
likely to be reflected in the company’s financials by the end of FY2012 and starting FY2013.
An improving domestic 2G environment, a favorable regulatory regime, (New Draft Telecom policy, TRAI’s new
set of recommendations on relaxation of M&A norms coupled with share spectrum sharing) are developments
in favour of Bharti. Also, visible volume and margin progress on the acquired African operations, and a strong
data opportunity in the form of 3G adoption awaiting in the wings coupled with the stock’s attractive valuation
keep us bullish.
The stock trades at a trailing EV/EBITDA of 10.0x, which appears attractive in view of the 21.7% EBITDA CAGR
over FY2011-13E. The implied EV/EBITDA-to-growth is ~0.52x which compares favourably with the average of
0.64x for the leading emerging market telecom companies (including China Mobile, Telecom, Indosat, Idea
Cellular and Bharti). Thus we maintain a Buy on Bharti valuing it at an EV/EBITDA of 8x. This leads to a price
target of Rs468.
See entire list of 10 companies and details: click link below:
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