Buy Bharti Airtel; target of Rs 720: Motilal Oswal
Motilal Oswal is bullish on Bharti Airtel recommended buy rating on the stock with a target price of Rs 720 in its research report dated April 27, 2021.
June 10, 2021 / 10:45 AM IST
Motilal Oswal's research report on Bharti Airtel
BHARTI has been an underperformer despite elevated expectations around business potential/growth. In this note, we highlight our key arguments as to why we believe it offers a good risk-reward equation Despite the COVID woes, Bharti has delivered estimated EBITDA growth of 28% and the trend should continue in FY22E with estimated consol. EBITDA growth of 21%. This should be on the back of steady market share gains; we think, irrespective of a tariff hike, earnings growth should continue to be strong. FCF generation and deleveraging have been a concern for the past 4–6 quarters. However, we are now seeing a more focused approach to drive healthy INR233b FCF (in FY23E) and corresponding deleveraging benefits.
The stock looks attractively valued at EV/EBITDA of 6x – as it does not capture the potential tariff hikes and garners 8% FCF yield on an FY23 basis. Maintain Buy, with TP of INR720.
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