What should investors do with Bharti Infratel post Q1 numbers - buy, sell or hold?

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Bharti Infratel share price declined 2 percent in the early trade on July 28 on weak June quarter numbers.

The company on Monday reported a 21 percent drop in its consolidated net profit to Rs 704 crore for the first quarter ended June. The net profit had stood at Rs 887 crore in the corresponding quarter of previous year.

The consolidated revenues for Q1 FY21 came in at Rs 3,505 crore, which was 6 percent lower YoY.

The company declared an interim dividend of Rs 2.30 per equity share of Rs 10 each for the financial year 2020-21.

The board has accepted the resignation of Mr. D S Rawat as managing director & CEO of the company and as a director from the board w.e f. the close of business hours on August 3, 2020.

Check out what brokerages says about the company and stock post its June quarter results:

Morgan Stanley | Rating: Underweight | Target: Rs 175

The gross tenancy additions lower due to pandemic with continued tenancy churn. The lower exit penalties, past tenancy deletions & negative energy margin dragged the EBITDA. Its receivables increased on QoQ basis, reported CNBC-TV18.

Jefferies | Rating: Underperform| Target: Rs 160

The Q1 disappointed with revenues, EBITDA & profits missing estimates. The core rental revenue & core EBITDA was marginally ahead of estimates. It has cut estimates by 2-3%, reported CNBC-TV18.

CLSA | Rating: Buy | Target: Rs 265

Company’s core revenue & EBITDA were stable, while tenancy additions impacted by the lockdown. Its Q1 core revenue & EBITDA were flat on QoQ basis & marginally ahead of the estimates.

Await update on its merger with Indus Tower and see stock’s 8% dividend yield as sustainable, reported CNBC-TV18.

Dolat Capital | Rating: Buy | Target: Rs 220

The stock is currently trading at attractive 12/10.5x FY21/22E EPS and dividend yield of 5.5%. Growth is a challenge for company with weak financials of VIL. Re-rating of company is contingent on survival of VIL which seems inevitable.

Motilal Oswal | Rating: Neutral

Consolidated net tenancy dropped by 365 to 1,74,216 versus the addition of 431 in 4QFY20. On the other hand, gross co-location exits dropped QoQ to 1,228 versus 2,067 in 4QFY20. However, gross adds also dropped to 863 versus 2,498. The average sharing factor stood at 1.82x versus 1.84x in 4QFY20. Rentals per tenant (per month) declined 1.5% QoQ to Rs 42,023.

At 09:27 hrs Bharti Infratel was quoting at Rs 191.65, down Rs 2.90, or 1.49 percent on the BSE.