MOSL: BHARTI AIRTEL (Buy)-Well invested, poised for growth-Better cost management in a tough operating environment
​Bharti Airtel: Well invested, poised for growth; Better cost management in a tough operating environment
(BHARTI IN, Mkt Cap USD23.1b, CMP INR373, TP INR430, 15% Upside, Buy)
- Consol. EBITDA drops 7% QoQ, but 3% above estimate: Consol. revenue fell 6% QoQ (-12.1% YoY) to INR219.3b, while consol. EBITDA declined 7.3% QoQ (-13.7 YoY) to INR78.6b (3% above estimate). RJio's free usage plan led to a drop of 6%/10% QoQ in India wireless revenue/EBITDA to INR129.7b/INR47.9b. India EBITDA was 7% above estimate due to lower discretionary cost. Despite Africa revenue declining 6% QoQ to INR50.5b, EBITDA grew 6% (4.7% beat) led by cost efficiencies. PAT fell 30% QoQ (-69% YoY) to INR4.7b on lower EBITDA. For FY17, consol. EBITDA rose 4% YoY to INR353b, led by 4% growth in India wireless EBITDA.
- Lower-than-expected decline in data revenue: Data revenue saw a lower-than-anticipated decline of 11% QoQ (7% beat), as volumes partly offset the 32% data price decline. Overall India wireless ARPU declined 8%/19% QoQ/YoY to INR158. Voice revenue fell 4.8% QoQ to INR92.5b (1% below estimate). Voice traffic grew 15% QoQ to 330b min, led by higher incoming traffic from RJio. This impacted India voice RPM, which declined by a steep 17% QoQ to INR0.243/min.
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.
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