Buy Bharti Infratel; target of Rs 505: Emkay

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26 Aug, 2025 12:21

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Emkay's reserach report on Bharti InfratelMultiple triggers for tenancy growth: Data coverage expansion both in existing and new regions, launch of service by R-Jio, 4G launch by incumbents and conversion of loading into actual 3G/4G sites Management ruled out any pressure on rentals and tenancy growt due to multiple technology BTS deployed by the telecom operators. There is significant headroom for incremental tenancies, driven by increasing focus on data coverage expansion Majority of the cost control rationalization efforts have been reflected in EBITDA growth and margin expansion in FY15. Going forward, margin expansion will be driven by incremental tenancy growth We continue to remain bullish on the company’s growth prospects, as increased capex spends by telecom operators provide visibility on tenancy growth. Given the recent stock price correction, we upgrade our rating to BUY with unchanged PT of Rs505 Continued data demand and data services roll-out in non-urban towns would accelerate demand for incremental BTS, going forward. Launch of 4G would also add to the tower demand from telcos. Recent purchase of 2100Mhz by Bharti and Vodafone would swell loading demand in the near-medium term. Telecom service providers have increased capex guidance for FY16E and it will remain at elevated level in medium term, to achieve data network expansion. Incremental tenancies from R-Jio on Infratel and Indus towers would also boost company’s operating performance, as incremental operating leverage would be driven by new tenancy. We estimate Revenue/EBITDA/PAT CAGR of 21%/24%/36% over FY15-17E. Higher capex spends by telecom operators provide increased visibility in tenancy growth for the company. At CMP of Rs405, stock trades at 14x/12x FY16/17E EV/EBITDA, with a 3% dividend yield. Given the recent stock price correction, we upgrade the stock to BUY with unchanged target price of Rs505.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.

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