Bharti Infra may see 10% growth in 2yrs: Centrum Broking

Bharti Infratel made a meek start to its innings at the bourses. The subsidiary of mobile operator Bharti Airtel , pre-opened at Rs 200 (on both the National Stock Exchange and Bombay Stock Exchange), much below the issue price of Rs 220. Analysts were not very hopeful about the stock and the telecom tower infrastructure service provider dropped below the Rs 200 level in early trade on Friday. 

Abhishek Anand of Centrum Broking believes the valuation was slightly expensive and therefore, there was an expectation that the stock might trade below its offer price. Going forward, he is of the opinion that the stock might see around 10 percent growth in a couple of years. "From the EPS target perspective for Bharti Infratel, it can touch close to Rs 4.5-5 in FY14," he added.
Besides, Anand feels the valuation comparisons appear a little expensive and he would be more comfortable to trade around Rs 180 levels considering a long term approach with a dividend yield from a two year time frame. "One point that I want to highlight is if you look at the free float, currently the company still holds 79 percent and of the remaining 21 percent, almost 85 percent of the holding is held by some 200 individual non-retail holders. Hence, tactically then it can hover around these levels," he explained Here is the edited transcript of the interview on CNBC-TV18. Q: Bharti Infratel sub Rs 200, did you guys see that coming, what kind of price were people talking about?
A: If you look at the valuation side, it looked a little expensive and therefore, there was an expectation that the stock could probably hold or go a tad below the offer price and we were also expecting similar kind of reactions. Q: What is your own financial outlook for this stock, both in terms of earnings and what your EPS target is?
A: We are looking at 10 percent kind of growth for a couple of years because what we believe is though data is growing, it may not be as fast to support stronger growth. From the EPS target perspective for Bharti Infratel, it can touch close to Rs 4.5-5 in FY14. Q: So would you buy the Bharti Infratel stock at sub Rs 200, at levels of around Rs 195?
A: I just want to highlight one point here. If you look at the valuation comparisons, though it appears a little expensive and I may probably be comfortable at sub Rs 180 levels looking at specifically a long-term story and dividend yield, probably with more than two years horizon. But, one point that I want to highlight is if you look at the free float, currently the company still holds 79 percent and of the remaining 21 percent, almost 85 percent of the holding is held by some 200 individual non-retail holders. Hence, tactically then it can hover around these levels.