Please refer to important disclosures at the end of this report
Bharti Airtel is leading provider of telecommunication services with presence in
20 countries representing India, Bangladesh, Sri Lanka and 17 countries in
Africa. It is India’s largest wireless operator with a pan-India mobility network
spanning all 22 telecom circles. India mobile services revenue for Bharti declined
11.5% YoY (6.2% QoQ) to Rs130bn on free offers by Reliance Jio and rate-
cutting by incumbents to retain their subscribers. Though Bharti’s subscriber-base
rose 8.9% YoY (+7.8mn net adds), ARPU dipped 18.9% YoY / 8.4% QoQ to
Rs158. Good news is that the company was able to grow its data subscribers
(+2.4mn net adds) and data usage (+31% QoQ). Network expansion continued
during the quarter, adding 3,350 mobile broadband towers (now ~72% of total
towers). Bharti also added 6,248Rkm of optic fiber (4,808Rkm in Q3FY17). Amid
turmoil, Bharti has carved out two key priorities: 1) focus on grabbing higher
revenue share, and 2) cost optimisation. The company strongly believes it is
lifetime opportunity to gain higher revenue market share notwithstanding the
challenging environment. On cost side, Bharti is aggressively working on each
tower’s P&L independently and also evaluating active infra sharing in rural areas
to drive better efficiencies. Further, if required, the company could sell further
stake in Bharti Infratel to strengthen its balance sheet. Bharti is better positioned
with a strong spectrum portfolio and network investment to gain from the
exploding data usage and also industry consolidation. Bharti has guided for
capex at US$3bn for FY18 of which US$2.5bn is for India business and
US$500mn for Africa. Majority of India capex would be towards 4G capacity
and fibre rollout while 2G/3G network rollout would be minimal. It has been
maintaining a healthy dividend payout of 22.50%. The company has a RoCE
10.56% and is trading at a valuation EV/EBITDA 7.42x of TTM earnings. Hence
CMP `421
Reuters Code
BSE Sensex
Face Value (`)
Telecom Services
Market Cap (` cr)
52 Week High / Low
Avg. Daily Volume
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
Bharti Airtel Ltd
Others | Telecom Services
July 20, 2017
Bharti Airtel | Telecom Services
June 5, 2017
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Bharti Airtel
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)