Hold Bharti Infratel; target of Rs 325: Edelweiss

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26 Aug, 2025 12:21

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Edelweiss' research report on Bharti Infratel

Bharti Infratel’s (Infratel) Q1FY19 revenue of INR36.7bn rose 0.3% QoQ versus Street’s 2.2% decline estimate. Rental revenue grew 0.6% QoQ despite 4,819 tenancy cancellations, driving 110bps increase in ex-energy EBITDA margin to 66.6%. Gross tenancy and tower addition, at 838 and 307, respectively, was much weaker than anticipated. We believe, weak gross tenancy addition highlights structural challenges for the company, especially at a juncture when telcos’ capex is high. Although the stock has corrected ~15% in the past three months, we believe rerating is possible only on tenancy addition revival.

Outlook
We revise down FY19/20E EBITDA 1.5%/3.9% to factor in lower tenancy growth rate. Maintain ‘HOLD’ with revised TP of INR325 (INR368 earlier).
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