Hold Bharti Infratel; Target Of Rs 220: ICICI Direct
ICICI Direct recommended hold rating on Bharti Infratel with a target price of Rs 220 in its research report dated October 24, 2020.
Oct 27, 2020 / 01:54 PM IST
ICICI Direct's research report on Bharti Infratel
Bharti Infratel reported a mixed performance. While core performance led by net tenancy addition of 2116 (highest in the last 13 quarters) was a pleasant surprise, negative energy spread led to a lower margin. Revenues (on a proportionate consolidation basis) came in at Rs 3695 crore, up 5.4% QoQ driven by energy revenues, up 9% QoQ, at Rs 1375 crore. Core rental revenues came in at Rs 2320 crore, up 3.4% QoQ. EBITDA came in at Rs 1817 crore, with margins of 49.2%, down 126 bps QoQ. EBITDA was impacted by energy margins wherein it recorded negative margins of 3.3%, as tenants have moved to pass through and some disputes thereafter. Reported PAT came in at Rs 732.6 crore (up 4.1% QoQ).
We upgrade to HOLD recommendation (vs. REDUCE earlier), with a revised target price of Rs 220/share, implying 6x FY22E EV/EBITDA (vs. 5x, earlier).
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