Feb 05, 2013, 05.07 PM | Source: Moneycontrol.com
Motilal Oswal is bullish on Bharti Airtel and has recommended buy rating on the stock with a target price of Rs 400 in its February 2, 2013 research report.
Motilal Oswal (more)
"Bharti's 3QFY13 PAT declined 72% YoY and 47% QoQ to INR2.84b (vs est of INR7.15b), dragged by higher finance cost (~INR2.5b forex loss) and tax rate (70% on consolidated basis). All QoQ comparisons are adjusted for one-time interconnect income booked in 2QFY13.
Consolidated revenue grew 9.6% YoY and 2.9% QoQ to INR 202.5b (vs est of INR202.3b). Consolidated EBITDA grew 3.8% YoY and 1.2% QoQ to INR 61.8b (vs est of INR62.6b) led by better performance in India mobile and telemedia.
Revenue for India and South Asia (SA) grew 8.4% YoY and 3.1% QoQ to INR142.7b (est INR142.7b). EBITDA grew 0.5% YoY and 1.7% QoQ to INR45.5b (est INR45.8b) largely driven by mobile segment.
India mobile traffic grew 2.8% QoQ (vs 5.2% for Idea); mobile RPM remained flat QoQ at 42.5p (vs 0.5% decline for Idea). Monthly churn declined to 5.9% in 3QFY13 vs 8.5% in 2QFY13.
Africa EBITDA increased 1% QoQ to USD300m (vs est of USD 312m) on a 3% QoQ revenue growth (11% QoQ traffic growth, 7% RPM decline). EBITDA margin declined 70bp QoQ to 26.5%.
Consolidated net debt declined to INR643b from INR668b (down from USD12.7b to USD11.7b) on capital raising in Bharti Infratel and FCF generation.
3QFY13 capex was INR23.8b (INR15b in India & SA; INR8.7b in Africa). 9MFY13 capex at USD1.8b; capex guidance for FY13 has been revised to USD2.5b. FY14 capex guidance stands at USD2.2-2.3b.
Valuation and view: We remain positive on India mobile business given healthy volume growth, declining churn, data revenue growth and expected RPM improvement. Our EBITDA estimates are largely unchanged but FY13 PAT estimate is revised downwards given higher finance costs and tax rate. We expect 11% EBITDA CAGR over FY13-15. Bharti trades at proportionate EV/EBITDA of 7.4x FY14E and 5.9x FY15E. Buy with TP of INR400 (INR390 earlier)," says Motilal Oswal research eport.
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