IndiaInfoline has recommended a buy rating on Bharti Airtel with a target price of Rs 1123 in its April 28, 2008 research report. "The company's revenues increased by 13.1% qoq driven by 12.4% qoq subscriber growth; FY08 subscriber added up 67%. Q4 wireless margins fell by 360 bps yoy on transfer of passive infrastructure to Infratel. Q4 PAT was higher by 32.9% qoq on lower interest cost."

"We value Bharti’s core wireless business on a DCF basis with 12. 1% WACC and terminal growth of 3% for a price of Rs 943. With Infratel and Indus combine likely to add about 35000 towers in FY09 and assured tenancy on Indus, the tower JV, we put the value of tower arm at USD 8.7 billion, or Rs 180 per share of Bharti. At our target price of Rs 1123, Bharti trades at a P/E of 18.3x and EV/EBIDTA of 8.3x FY10E earnings. As network coverage reaches a majority of population, mobile capex would gradually decline which implies company would have significant free cash flows going forward (estimated USD 3.1 billion by FY10) that could be used for inorganic growth or to bid aggressively in 3G auctions. Recommend BUY," says IndiaInfoline's research report.

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