Emkay Global Financial is bearish on Bharti Infratel has recommended sell rating on the stock with a target price of Rs 153 in its research report dated July 28, 2020.
Emkay Global Financial's report on Bharti Infratel
BHIN IN reported an EBITDA miss, primarily due to lower energy reimbursements (-8% qoq). Energy margins, which stood at -2%, surprised negatively, and were pushed downward by Indus. At the standalone level, energy margins stood at 4.8%. Gross tenancy additions of 862 was weakest in last 7 quarters. Net tenancies declined by 366 due to the exits from VIL, while the sharing factor continued to see a marked drop on a standalone basis. Management believes that the underlying business is back to normalcy after large-scale tenancy exits over the last two years. We have already baked in net tenancy addition improvement from Q2. Energy margin guidance is lowered to 0-3% from 3%.
We continue to highlight that the stock lacks catalysts until clarity emerges on VIL’s survival. We are keeping our estimates largely unchanged, while maintaining our Sell recommendation with a revised TP of Rs153 (4x Sept’22E EBITDA). We are UW in EAP.
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