Motilal Oswal has maintained its buy rating on Bharti Airtel with a target of Rs 1020 and Reliance Communications with a target of Rs 350 in its December 18, 2008 research report. "We maintain Buy on Bharti which remains our top pick on highest earnings visibility in the current challenging margin environment, low capex intensity, unlevered balance sheet, and relatively better-positioned tower portfolio for potential value accretion, target of Rs 1020. Valuations at 7.3x EV/EBITDA and 13.2x P/E FY10E are well supported by 25-30% earnings and EBITDA CAGR over FY08-10E. "
"We also find the valuations attractive for RCOM given a significant discount of 25-35% v/s Bharti on EV/EBITDA and 50% on P/E. We maintain Buy on RCOM based on upside to KPIs and market share post GSM scale-up, target of Rs 350. We believe that RCOM should be beneficiary of easing liquidity while concerns on leverage and margins appear overdone," says Motilal Oswal's research report.
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