Buy Bharti Infratel: target of Rs 245: ICICI Securities

ICICI Securities research report on Bharti Infratel

At CMP, Bharti Infratel (BHIN) provides a huge margin of safety and an opportunity to earn dividend of Rs17.8 per share. This means the effective price of buying BHIN is Rs160 per share. Our working shows, in worst case of VIL shutdown, the fair value of BHIN dips to Rs130-150 per share. However, the probability of VIL shutting down has been reducing with staggered AGR payment and the company’s efforts to raise fresh capital. Further, any tariff hike, which is imminent, will increase confidence among investors. The new scheme of arrangement also provides additional security in terms of merged entity share pledge by Vodafone Plc.

Outlook

We believe 5G will open up new business opportunities such as higher core rentals, and small cell and fiber business. Reiterate BUY with an unchanged target price of Rs245.