Motilal Oswal is bullish on Bharti Airtel has recommended buy rating on the stock with a target price of Rs 420 in its research report dated August 03, 2019.
Motilal Oswal's research report on Bharti Airtel
BHARTI reported a steady 2% QoQ growth in consol. EBITDA to INR67.8b (in-line) on a pre-Ind-AS 116 basis. India wireless revenue increased for the second straight quarter (+2% QoQ), but EBITDA declined 2% QoQ off a high base (+31% QoQ in 4QFY19 led by some one-offs). BHARTI is fighting the 4G battle well with 8.4m subscriber adds (30-35% of estimated incremental share), higher than VIL's addition of ~5m. ARPUs have been improving steadily - up 4% QoQ to INR129, now ahead of VIL/RJio's INR108/INR122.
Outlook
We maintain our TP at INR420, ascribing 11x EV/EBITDA to the India business and 5x to the Africa business, given the low trading multiples. While the steady EBITDA performance, deleveraging and the improving FCF position have protected the stock even in the current weak market, incremental upside would hinge on pricing actions, in our view. Maintain Buy.
For all recommendations report, click here
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