Analyst Research Report Snapshot

Title:

MOSL: BHARTI AIRTEL (Buy) - Above estimates led by continued strong performance in India Mobile

Price:

$104.00

Provider:

Motilal Oswal Securities Ltd.

Date:

30 Jul 2014

Pages:

12

Type:

AcrobatPDF

Companies referenced:

BRTI.NS

Available for Immediate Download
Summary:

BHARTI AIRTEL 1QFY15: Above estimates led by continued strong performance in India Mobile; upgrading EBITDA 4% and TP 14%; Buy (BHARTI IN, Mkt. Cap USD23.6b, CMP INR354, TP INR465, 31% Upside, Buy) 1QFY15 revenue/EBITDA above estimates; continued strong growth in PAT: BHARTI’s 1QFY15 EBITDA grew 18% YoY and 5.7% QoQ to INR 77.2b (est INR74.6b) driven by strong performance in India mobile business. Consolidated revenue grew 13.3% YoY and 3.3% QoQ to INR 229.6b (vs est INR224.9b), boosted by India mobile, Telemedia and DTH segments but dragged down by Africa business. Proforma PAT increased 97% YoY and 13.8% QoQ to INR13.6b. Reported PAT of INR11.1b included INR2.5b exceptional loss due to various disputes. PAT performance was strong despite INR3b forex loss. Continued robust recovery in India mobile: India mobile revenue grew 9.9% YoY and 5.5% QoQ to INR127.5b. EBITDA grew 25% YoY and 11.7% QoQ to INR47.1b (vs est of INR44b). Mobile traffic grew 2.3% QoQ (vs est of 1.5%); mobile RPM increased 3.5% QoQ to 46.5p (vs est of 45.6p). Data revenue contribution increased to 12.4% (up 90bp QoQ) on 17% QoQ traffic growth. Africa performance remains muted: Africa EBIDTA declined 2.3% QoQ to USD283m (vs est USD286m). Revenue grew 1.6% QoQ (primarily RPM led), impacted by 1.4% revenue-weighted currency depreciation. Subscriber base declined QoQ due to promotional bans in Nigeria and KYC changes in Uganda. Net debt down INR28b QoQ to INR577b: Net debt declined 4.6% QoQ to INR577b on strong free cash generation. 1QFY15 capex stood at INR39.9b. Change in segment reporting: BHARTI has made changes to the segment reporting structure. India & South Asia will include 1) Bangladesh and Srilanka operations and 2) Acquisition debt/associated finance cost of Africa business. Upgrading EBITDA by 4%; TP by 14%; maintain Buy: We are upgrading our EBITDA estimates by ~4%. We expect 14% consolidated EBITDA CAGR over FY14-16E. The stock trades at proportionate EV/EBITDA of 6.5x FY15E and 5.6x FY16E. Maintain Buy with a revised target price of INR465 (INR410 earlier) based on 6.5x FY14 EV/EBITDA for India business (ex towers), 5x EV/EBITDA for Africa, and 15% discount vs fair value for Bharti Infratel (recently upgraded).

Why buy analyst research?

  • Institutional quality research
  • Available for Immediate Download
  • Detailed company or industry insight
  • Print or save
  • 24 hour customer support
Return to previous page without adding this item to your cart.
Email Customer Support.

About Analyst Research

Analyst research reports are available for immediate download after purchase. You will have unlimited access to the report for 24 hours after purchase, to download, print or save it as many times as you wish. Analyst Research provided by Reuters does not constitute investment advice, and is not endorsed by Reuters Research. This information is protected by copyright and intellectual property laws. More information on Analyst Research.