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CLSA maintains buy on Bharti Airtel citing market share gain, net work investments

November 30
21:05 2017
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Giving a positive view on Bharti Airtel, CLSA has maintained a buy call on the stock with a target of Rs 640.

The global research firm said that market share gains in metros, where Jio has had the highest impact, has underscored the market strength of the Sunil Mittal-led company.

Further, the firm also highlighted that Bharti has been relentless in network investments.

Going forward, beyond H2 Fy18, CLSA expects 16 percent EBITDA CAGR and 9 times jump in net profit by FY21. It also expects 7 percent CAGR in Bharti’s ARPU over FY18-21.

But, the brokerage also expects sharp cut in IUC and Jio’s 4G feature phone to keep H2 under pressure.

The company was in the news recently after its management hinted at further acquisitions.

Speaking to The Economic Times, Mittal had said that Airtel was open to acquisition talks with Aircel. He added that Aircel has two options, either to join Vodafone-Idea or go ahead with Airtel.

“Whenever there will be a possibility of a conversation, I have no doubt, we will be a part of that conversation,” he said.

Aircel’s debt was earlier pegged at around Rs 18,000 crore but was partly adjusted after it sold its 2100 MHz spectrum to Airtel for Rs 3,000 crore.

At 12:10 hrs Bharti Airtel was quoting at Rs 493.00, down Rs 2.70, or 0.54 percent, on the BSE. It touched an intraday high of Rs 495.40 and an intraday low of Rs 490.00.

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