1
Please refer to important disclosures at the end of this report
1
1
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
BUY.
BUY
CMP `421
0.8
Reuters Code
BRTI.NS
BHARTI:IN
5
BSE Sensex
31,813
Nifty
9,852
Face Value (`)
Telecom Services
Market Cap (` cr)
168,390
52 Week High / Low
429.60/283.95
Avg. Daily Volume
210,338
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
Bharti Airtel Ltd
Others | Telecom Services
July 20, 2017
2
Bharti Airtel | Telecom Services
June 5, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
DISCLAIMER
Angel Broking Private Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India Limited,
Bombay Stock Exchange Limited and Metropolitan Stock Exchange Limited. It is also registered as a Depository Participant with CDSL
and Portfolio Manager with SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel Broking Private Limited is a
registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration number
INH000000164. Angel or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing
/dealing in securities Market. Angel or its associates/analyst has not received any compensation / managed or co-managed public
offering of securities of the company covered by Analyst during the past twelve months.
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should
make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the
companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine
the merits and risks of such an investment.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals. Investors are advised to refer the Fundamental and Technical Research Reports available on our website to evaluate the
contrary view, if any.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Pvt. Limited or any of its affiliates/ group companies shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Pvt. Limited has not independently verified all the information contained within this document. Accordingly, we cannot
testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document.
While Angel Broking Pvt. Limited endeavors to update on a reasonable basis the information discussed in this material, there may be
regulatory, compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Neither Angel Broking Pvt. Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from
or in connection with the use of this information.
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)