Accumulate Bharti Airtel; target Rs 425: Angel Broking

89346 Investors following Bharti Airtel. Share this News with them.

0

Like this story, share it with millions of investors on M3

Accumulate Bharti Airtel; target Rs 425: Angel Broking

Angel Broking is bullish on Bharti Airtel and has recommended accumulate rating on the stock with a target price of Rs 425 in its November 4, 2011 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Here's Emkay Global's buy, sell or hold list Buy Bank of Baroda; target of Rs 999: Aditya Birla Money Hold Bharti Airtel; target Rs 417: Microsec ALSO READ See previous views by Angel Broking See what other Experts & Brokerages are saying about Bharti Airtel See messages about Bharti Airtel Bharti Airtel BSE | NSE 30/05/12 Are Mutual Funds betting on Bharti Airtel?

Angel Broking is bullish on Bharti Airtel and has recommended accumulate rating on the stock with a target price of Rs 425 in its November 4, 2011 research report.

"Bharti Airtel (Bharti) reported a mixed performance for 2QFY2012. The company's revenue came in-line with our expectations, while PAT came below expectations due to higher interest and forex loss. Also, KPIs of India business declined during the quarter, leading to lower revenue growth in India mobile business. Bharti emerged as the first-mover in undertaking price increases in prepaid call charges, the full impact of which will flow from 3QFY2012 and will aid the company's average revenue per minute (ARPM)."

"For 2QFY2012, Bharti's consolidated revenue stood at Rs 17,276cr (1.7% qoq growth). Revenue from mobile services for India came in at Rs 9,783cr, down 0.6% qoq (lower growth than estimated), due to a 4.9% qoq decline in minutes of usage (MOU) to 423min, as call drop rates are higher in 2Q. However, ARPM grew by 0.9% qoq to Rs 0.43/min. Zain Africa's contribution to revenue stood at Rs 4,591cr, up 4.9% qoq, because of 5.5% qoq growth in MOU to 128min, whereas ARPM declined by 5.4% qoq to 5.7US¢/min. EBITDA margin of mobile India as well as Africa business decreased by 50bp and 45bp qoq to 33.7% and 26.7%, respectively. Consolidated EBITDA margin for Bharti stood at 33.7%, almost flat qoq. Net profit stood at Rs 1,027cr, down 15.5% qoq, negatively affected by higher interest cost of Rs 1,318cr, which includes forex loss of Rs 239cr."

"Bharti is on its way to turnaround its Africa business by bringing down its network operating expenditure by outsourcing various network-related developments. Thus, we expect the combination of improving KPIs and cost efficiencies to drive the EBITDA margin for the Africa business to 26.6% and 27.0% by FY2012 and FY2013, respectively. We expect Bharti's Indian and African mobile subscriber base to grow at a CAGR of 8.2% and 16.9% over FY2011-13E to 190.0mn and 60.4mn subscribers, respectively. We maintain our Accumulate rating on the stock with a target price of Rs 425, valuing Bharti at EV/EBITDA of 7.0x FY2013E EBITDA," says Angel Broking research report.

Non-Institutions holding more than 90% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment