January 25, 2017 / 17:30 IST
Bharti Infratel (Infratel) reported Q3FY17 revenue of INR 34.0bn (up 3.3% QoQ), versus Street’s INR 32.1bn estimate, due to spurt in tenancy addition and higher energy revenue. EBITDA margin fell 50bps QoQ to 43.5% versus Street’s 44.0% estimate due to higher contribution of low margin energy revenue and seasonality.
Outlook
Spurt in tenancy addition was led by pent-up demand (held back due to spectrum auction) and increased contribution from Reliance Jio (RJIO). The latter bolsters our confidence in Infratel’s revenue growth trajectory. However, possible merger of Vodafone and Idea is a key risk for the company’s revenue and earnings. Maintain ‘HOLD’ with DCF-based target price of INR 400.
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