Hold Bharti Infratel; target of Rs 220: ICICI Direct

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).

Outlook

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).

For all recommendations report, 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.

Read More