Bharti Airtel a market performer; target Rs 315: Karvy

Karvy Stock Broking has maintained market performer rating on Bharti Airtel with a target price of Rs 315 in its reports dated February 26, 2010.

"Bharti Airtel’s Indian operations are characterised by strong free cash flow generation. Thus, on account of this the telco believes it would be better off used to invest in expansion opportunities rather than kept on its books. Thus, it believes it makes more sense to look at brownfield ventures, that is choose ‘buy’ over ‘build’. Bharti Airtel has clearly articulated its strategy to export its ‘minute factory model’ to Zain Africa. This we believe is the cornerstone of its strategy to grow in the African market. We maintain our ‘Market performer’ rating on the stock with a target price of Rs 315, which includes Rs 265 as the value of the core business and Rs 50 as the value of the towerco (Rs 30 as the value of its 42% stake in Indus Towers and Rs 20 as the value of Bharti Infratel standalone), based on our DCF calculations, "says Karvy Stock Broking.

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