Motilal Oswal has given Buy recommendation for Bharti Airtel recommended buy rating on the stock with a target price of Rs 920 in its research rep with a target price of Rs. 920 in its research report issued on Nov 22, 2021
Motilal Oswal’s research report on Bharti Airtel
The effective tariff hike of ~20% in prepaid plans is expected to contribute incremental revenue/EBITDA of INR103b/INR72b, thereby driving 13% consolidated EBITDA growth on a 2QFY22 annualized basis. -To improve cash flow in the industry, other large players are expected to follow suit in the immediate future. Bharti’s lower churn and strong network capability leaves room for a potentially healthy EBITDA increase, in line with the tariff hike in Dec’19. The significant reduction in the data allowance across price plans leaves limited possibility for downtrading.
We see potential for a re-rating in both the India and Africa business on the back of steady earnings growth. We value Bharti on a Sep’23E basis, assigning an EV/EBITDA of 10x/4x to the India Mobile/Africa business, arriving at a SoTP-based TP of INR920. We maintain our Buy rating.