Credit Suisse upgrades Bharti Infratel to ‘outperform’ from ‘neutral’
Credit Suisse has upgraded shares of Bharti Infratel to ‘outperform’ from ‘neutral’, stating that the recent fall in the share price amid concern that the company will suffer from consolidation in the telecom industry, is overdone.
“We see value even after factoring in harsh cuts to business from Vodafone and Idea,” said Credit Suisse in a report.
Earlier this week, Vodafone confirmed that it is in talks to merge its Indian operations with Idea Cellular.
However, the brokerage did cut target price to Rs 335 from Rs 360, assigning 60% probability to the merger of Vodafone and Idea going through. Credit Suisse estimates that Vodafone and Idea combined account for around 40% of business for Bharti Infratel and Indus.
Credit Suisse said Bharti Infratel has a fairly stable business, with no regulatory risks and low competition risks.
The brokerage said that it is not clear if parent Bharti will still move ahead with majority stake sale in Bharti Infratel, it remains a potential upside catalyst for the stock.
Credit Suisse's upgrades comes after global brokerage firm CLSA on Tuesday downgraded shares of Bharti Infratel to ‘outperform’ from ‘buy’ and cut target price by nearly 21% to Rs 356 citing weak growth outlook.
CLSA had said that site rationalisation by the merged entity of Vodafone and Idea could potentially lead to a loss 4,000 tenancies for Bharti Infratel.
“We see value even after factoring in harsh cuts to business from Vodafone and Idea,” said Credit Suisse in a report.
Earlier this week, Vodafone confirmed that it is in talks to merge its Indian operations with Idea Cellular.
However, the brokerage did cut target price to Rs 335 from Rs 360, assigning 60% probability to the merger of Vodafone and Idea going through. Credit Suisse estimates that Vodafone and Idea combined account for around 40% of business for Bharti Infratel and Indus.
Credit Suisse said Bharti Infratel has a fairly stable business, with no regulatory risks and low competition risks.
The brokerage said that it is not clear if parent Bharti will still move ahead with majority stake sale in Bharti Infratel, it remains a potential upside catalyst for the stock.
Credit Suisse's upgrades comes after global brokerage firm CLSA on Tuesday downgraded shares of Bharti Infratel to ‘outperform’ from ‘buy’ and cut target price by nearly 21% to Rs 356 citing weak growth outlook.
CLSA had said that site rationalisation by the merged entity of Vodafone and Idea could potentially lead to a loss 4,000 tenancies for Bharti Infratel.
