Motilal Oswal has given Buy recommendation for Bharti Airtel recommended buy rating on the stock with a target price of Rs 910 in its researc with a target price of Rs. 910 in its research report issued on May 18, 2022

Motilal Oswal’s research report on Bharti Airtel

Bharti Airtel (Airtel) witnessed strong EBITDA growth of 9% QoQ and healthy FCF generation driven by 9% ARPU improvement and healthy incremental margin. It continued to gain both revenue and subscriber market shares. However, the key dampener was that the improvements did not translate into deleveraging. Despite the current weak macro environment, Airtel has the ability to generate strong 20%+ EBITDA growth over the next two years driven by: a) 4G mix improvement, b) market share gains, c) regular tariff hikes and d) steady inroads into the non-wireless business, translating into a strong >INR300b estimated FCF (post-interest) and deleveraging. Maintain BUY.

Outlook

We see potential rerating upsides in both India and Africa businesses aided by steady earnings growth. We value Airtel on FY24E, assigning EV/EBITDA of 11x to the India Mobile business and 5x to the Africa business, to arrive at our SOTPbased TP of INR910. The ensuing earnings growth, 5% FCF yield, and ~25% deleveraging hold it in good stead. Maintain BUY.

Leave a Reply

Your email address will not be published.