Africa IPO is around the corner and could lower debt by $750-862 million, CLSA said
Telecom operator Bharti Airtel shares gained nearly a percent intraday on June 13 after global brokerage CLSA maintained its positive view on the stock on strong operational growth in Africa business.
At 1140 hours IST, the stock was quoting at Rs 363.10, up Rs 3.30, or 0.92 percent on the BSE.
While having a buy call with a target price of Rs 425, implying 18 percent potential upside, CLSA said operational growth in Africa is expected to continue and Africa business is gearing comfortable at 3x EBITDA.
In FY19, Africa business' earnings before interest, tax, depreciation and amortisation (EBITDA) increased 15 percent YoY and company will enjoy a 12 percent CAGR, the brokerage said.
Net debt of its Africa segment declined $3.7 billion to $4 billion and its operating cashflow increased 24 percent YoY, but free cash flow declined as capex doubled.
CLSA said the deleveraging should now drive a sustainable free cash flow turnaround.
Africa IPO is around the corner and could lower debt by $750-862 million, it added.
Last week, the telecom operator had said its subsidiary Airtel Africa expects to raise at least $750 million (approximately Rs 5,189 crore) through a public offer and subsequent listing on the London Stock Exchange.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.The Great Diwali Discount!
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