Buy Bharti Airtel; target of Rs 700: Motilal Oswal

Motilal Oswal 's research report on Bharti Airtel

Bharti Airtel's 1QFY21 performance was better than expectations despite the COVID-19 led lockdown. India Mobile EBITDA grew 3% QoQ (10% above est.) while consol. EBITDA growth 2.4% QoQ, which reflects healthy recovery in Jun'20. Positive FCF and de-leveraging resumed with INR23b net debt reduction. We largely maintain our FY21/FY22E consol. EBITDA estimates. We have built in 7%/14% ARPU increase for FY21/FY22E, translating into 20% EBITDA CAGR over FY20-22E. 2QFY21 is expected to see healthy 4-5% India mobile revenue growth QoQ based on exit ARPU/subs as at 1QFY21 and 4G subs adds trajectory in Jun'20.

Outlook

We have increased AGR liability to INR230b (v/s INR180b earlier) to factor in the remaining part of liability as per the DoT demand. Subsequently, we have arrived at SOTP-based TP of INR700 and Maintain Buy.

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