Feb 27, 2010, 11.32 AM IST | Source: Moneycontrol.com

Sell Bharti Airtel: Anand Rathi Securities

Anand Rathi Securities has maintained sell rating on Bharti Airtel in its report dated February 25, 2010.

Ashish Chaturmohta

Vice President Retail Research (Derivatives and Technical Desk)

Expertise : Equity - Technical

More about the Expert...

Anand Rathi Securities has maintained sell rating on Bharti Airtel in its report dated February 25, 2010.

India is generating significant FCF (we est. US$350-400m per quarter) which, combined with Bhartis deep execution capabilities, can be utilized in similar emerging markets, as per Bharti management. The attractiveness of Zain Africa (ZA) lies in: (1) large aggregate population of 470m, with low penetration (36%) and >7% GDP growth; (2) Low competition, and strong market position of ZA, which is #1 in 10 of the 15 markets; (3) High tariffs reflected in ARPM of US$0.07, and low MOU of <100/month; (4) Opportunities for cost optimization given lower margins. Leverage would remain reasonable (Consol. Debt/EBITDA<=2x), even with 100% debt financing, but mgmt also expressed aversion to high debt levels and therefore, did not rule out the possibility equity raising, which may either be done at Bharti Airtel level or tower-co level. We believe the US$3.2bn decline in Bhartis market cap since Feb 11, adequately reflects the risk of value erosion from Zain. We however, maintain Sell, given lack of ST catalysts, "says Anand Rathi Securities report.

Disclaimer: The views and investment tips expressed by investment experts 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 here

Set email alert for


Buy & sell politicians on Power Play
- the political stock exchange

Price Update

Rahul Gandhi

580.9 -7.41 -1.26%


Bought today


Sold today


User holding

video of the day

Chandra says satisfied with TCS' FY14, FY15 to be better

Explore Moneycontrol

Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.