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Buy Bharti Airtel; target of Rs 910: Motilal Oswal

Motilal Oswal is bullish on Bharti Airtel recommended buy rating on the stock with a target price of Rs 910 in its research report dated August 10, 2022.

August 11, 2022 / 03:07 PM IST
 
 
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Motilal Oswal's research report on Bharti Airtel


Bharti reported a steady quarter with healthy 3% QoQ consol. EBITDA growth that translated into a strong FCF generation and deleveraging. These were missing in the last few quarters. The healthy growth was aided by India Mobile/Africa EBITDA growth of 5% each on the back of sound ARPU improvement (in line with RJio). Bharti’s EBITDA rose by >30% over FY19-22. We expect an 18% EBITDA CAGR during FY22-24 fueled by: a) 4G mix improvement, b) market share gains, and c) steady inroads into the non-wireless business (tariff hikes not factored in). All these factors are likely to translate into a strong >INR300b estimated FCF (post-interest) and deleveraging. Intensification of 5G-led capex in the near term would still keep its FCF strong. Maintain BUY.



Outlook


We value Bharti on FY24E, assigning 11x EV/EBITDA to the India Mobile business and 5x to the Africa business, and arriving at our SoTPbased TP of INR910. The ensuing earnings growth, 5% FCF yield, and ~25% deleveraging augur well for the stock. Maintain BUY.

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Bharti Airtel - 100822 - moti

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first published: Aug 11, 2022 03:02 pm
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