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Wednesday, 1 November 2017

Bharti Airtel hits 10-year high, up 8% on stellar Africa earnings, hope of early tower biz sale!

Country' slargest telecom operator Bharti Airtel's share price touched a fresh 10-year high on Wednesday, rising nearly 8 percent intraday after the stellar Africa business performance in September quarter. The rally was also fuelled by hope of early sale of tower business.

The stock price hit an intraday high of Rs 536.05, the highest level since October 2007, on the Bombay Stock Exchange. It rallied 28 percent in October, after acquisition of consumer telecom business from Tata Teleservices and on hope of stabilisation in tariff rates. At 10:55 hours IST, it was quoting at Rs 530.35, up 6.57 percent.

Consolidated profit, however, was lower by 6.6 percent sequentially to Rs 343 crore, dented by pricing pressure in India business; but Africa business boosted its operational earnings.
Consolidated revenue from operations slipped 0.8 percent quarter-on-quarter to Rs 21,776.9 crore as India business revenue dropped 5.2 percent sequentially to Rs 12,245 crore.Analysts said Airtel posted solid set of numbers in a tough quarter.
While reiterating a buy call on the stock with a target price at Rs 495 per share, UBS said India mobile business revenue declined but key performance indicators showed strong defence against competitor.
CSLA has upgraded Bharti Airtel to buy from underperform and raised target price to Rs 637 from Rs 430 per share as consolidation & data have revived long-term growth.

The research house sees 16 percent CAGR in EBITDA over FY18-21 and feels long-term growth is set to revive starting FY19.
Credit Suisse, however, has retained its neutral rating on the stock, though it raised target price to Rs 430 from Rs 400 per share after increase in EPS estimates by 5-6 percent for the current and next financial year to factor in better Africa margins.
Meanwhile, Airtel has been approached by a few reputed global investors to acquire a significant stake in Bharti Infratel which, if accepted, could result in such investors acquiring control of Bharti Infratel," the telecom major said in its filing.

The committee of directors of Bharti Airtel is considering the proposal received from the global firms. Bharti Airtel holds 50.33 percent stake in Bharti Infratel and its wholly owned subsidiary Nettle Infrastructure Investments 7.68 percent stake.

Bharti Infratel on Monday had said it would explore acquiring additional stake in Indus Towers. Bharti Infratel and Vodafone India hold 42 percent stake in Indus Towers and rest is held by Idea Cellular.

The deal between Bharti Infratel and Indus, if it happens, will create India's largest mobile tower company with about two-and-a-half times the size of its nearest rival BSNL, as per the industry figures.

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