MOSL: BHARTI AIRTEL (Buy)-Strong performance amidst headwinds; Debt increases due to provisions toward AGR liability
BHARTI AIRTEL: Strong performance amidst headwinds; Debt increases due to provisions toward AGR liability
(BHARTI IN, Mkt Cap USD25.9b, CMP INR365, TP INR425, 16% Upside, Buy)
Strong operating performance
- Despite all the hustle in the telecom space, BHARTI surprised with 7% QoQ EBITDA growth to INR88.6b (10% beat without adjusting for Ind-AS 116 impact). Particularly, India mobile EBITDA trended higher (+3% QoQ) for the third consecutive quarter, led by stable domestic wireless revenue (+1% QoQ) despite seasonal weakness.
- SG&A costs were down INR6b in the quarter. In our view, this trend is largely sustainable as management’s efforts on waste and digital initiatives have started bearing fruit. Moreover, net finance cost declined 9% QoQ to INR29.1b, led by the recent deleveraging efforts.
- 4G subscriber adds stood at 8m, taking over 30% incremental market share in a highly competitive market. The big dampener this quarter was INR307b exceptional charge toward AGR liability (license fee/SUC) and Africa pre-IPO investor indemnity, which led to a net loss of INR228.3b. However, recurring adj. loss was at INR11.2b versus our estimate of a net loss of INR14b.
Bharti Airtel provides telecommunication systems and services to individuals and businesses in India with operations in 20 countries across Asia and Africa. In India, Co.'s product offerings include 2G, 3G and 4G wireless services, mobile commerce, fixed line services, high speed DSL broadband, IPTV, DTH, enterprise services including national & international long distance services to carriers. In the rest of the geographies, it offers 2G, 3G wireless services and mobile commerce. Co. had nearly 287 million customers across its operations at the end of Dec 2013.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.