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Bharti Airtel
Investment case: Bharti is the leading mobile operator in India in terms of both
revenue and subscriber market share. It is one of our preferred stocks in the
sector as: 1) we remain positive on the outlook for the sector as we see
increasing evidence of an improving regulatory and pricing environment. Given
its dominant position in the sector, we expect Bharti to emerge as one of the
beneficiaries of the improving outlook; 2) we believe India is at an inflexion
point of mobile data growth post the 3G launch, and we expect the company to
benefit from uptake of data usage. We expect to see some evidence of data pickup
in 2012; and 3) we think the Zain acquisition is likely to be positive in the
medium term. We expect the transaction to be EPS-accretive from FY13.
Valuation: Our price target of Rs530.00 is SOTP-based. We value India/South
Africa operations at Rs453, Bharti Infratel at Rs45, the stake in Indus Towers at
Rs54 and Africa operations at Rs10. We also incorporate a charge of Rs32
towards one time spectrum fees, spectrum renewal fees and savings from
uniform license fees. We used a WACC of 10.7% in our DCF to value Bharti’s
India/South Africa operations.
2012 Catalysts: 1) The new telecom policy (NTP 2011) is likely to be
announced during the year; 2) broadband wireless access (BWA) companies are
likely to launch data services in H112; 3) strong operating performance in
Bharti’s Africa operations; and 4) clarity likely to emerge on issues pertaining to
2G spectrum pricing and allocation.
read details and other companies in list (click link below)
UBS India – Outlook 2012 ::Most & Least Preferred Stock Ideas for 2012
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Bharti Airtel
Investment case: Bharti is the leading mobile operator in India in terms of both
revenue and subscriber market share. It is one of our preferred stocks in the
sector as: 1) we remain positive on the outlook for the sector as we see
increasing evidence of an improving regulatory and pricing environment. Given
its dominant position in the sector, we expect Bharti to emerge as one of the
beneficiaries of the improving outlook; 2) we believe India is at an inflexion
point of mobile data growth post the 3G launch, and we expect the company to
benefit from uptake of data usage. We expect to see some evidence of data pickup
in 2012; and 3) we think the Zain acquisition is likely to be positive in the
medium term. We expect the transaction to be EPS-accretive from FY13.
Valuation: Our price target of Rs530.00 is SOTP-based. We value India/South
Africa operations at Rs453, Bharti Infratel at Rs45, the stake in Indus Towers at
Rs54 and Africa operations at Rs10. We also incorporate a charge of Rs32
towards one time spectrum fees, spectrum renewal fees and savings from
uniform license fees. We used a WACC of 10.7% in our DCF to value Bharti’s
India/South Africa operations.
2012 Catalysts: 1) The new telecom policy (NTP 2011) is likely to be
announced during the year; 2) broadband wireless access (BWA) companies are
likely to launch data services in H112; 3) strong operating performance in
Bharti’s Africa operations; and 4) clarity likely to emerge on issues pertaining to
2G spectrum pricing and allocation.
read details and other companies in list (click link below)
UBS India – Outlook 2012 ::Most & Least Preferred Stock Ideas for 2012
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