ICICI Direct's research report on Bharti Infratel
Revenues (on a proportionate consolidation basis) were at Rs 3401 crore, up 9.5% YoY, 3.3% QoQ, slightly higher than our estimate of Rs 3351.5 crore. Co-locations addition at 6139 was higher than our estimates of 5687, indicating the company was a beneficiary of Jio’s incremental tower addition. Average tenancy ratio was at 2.24x (up 1.5% QoQ).
Outlook
Consequently, our DCF assumptions now build in 4.0%, 4.5% revenues, EBITDA CAGR in FY19- 23E vs. 7.1%, 7.8% CAGR, respectively earlier. The company’s intent on diversification into optic fibre business could bring in potential upside. We believe the recent price correction is overdone. Hence, we maintain BUY recommendation with a target price of Rs 350.
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