Buy Bharti Infratel; target of Rs 450: ICICI Direct

ICICI Direct's research report on  Bharti InfratelBharti Infratel reported its Q1FY17 numbers under the new IND AS wherein Indus numbers were reported under equity account (share of profit from JV) vs. proportionate consolidation earlier On a like to like basis, revenues came in at Rs 3210.6 crore, up 6.9% YoY, lower than our expectation of a topline of Rs 3142.1 crore. Revenues from rentals grew 9.1% YoY to Rs 2057.3 crore as consolidated tenancies grew from 2.13 to 2.2 over the same period. Rental revenues grew 2% YoY to Rs 1153.3 crore. EBITDA came in at Rs 1394 crore, up 8.1% YoY vs. expectations of Rs 1382.3 crore. EBITDA margins were at 43.4% in line with our expectations of 43.5%. Energy margins at 3.4% were lower than our expectations of 5%. PAT came in at Rs 756.2 crore (vs. expectation of Rs 629.7 crore). PAT under IGAAP came in at Rs 661 crore, a tad higher than our estimates owing to lower depreciation. PAT under IND AS was higher mainly due to the effect of IND wherein the difference in fair value of assets has now passed to P&L.

 

Not withstanding near term growth hiccups, BIL remains a key play on rising demand of telecom towers emanating from ballooning data growth and opportunity owing to the huge quantum of spectrum and its subsequent roll out. We maintain our BUY recommendation with a target price of Rs 450, based on a SOTP-DCF based methodology. For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies 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.