9 BHARTIARTL share price target reports by brokerages below. See what is analyst's view on BHARTIARTL share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
Bharti Airtel Limited is a leading global telecommunications company with operations in 16 countries across Asia and Africa. The company had over 423 million customers across its operations at the end of Q4FY20. Consolidated revenue rose to Rs. 23,723cr (+15.1% YoY), supported by Mobile services from India (+21.8% YoY) and Africa (+17.7%) and, Airtel businesses (+12.4%). EBITDA grew 54.2% YoY with improved margins (+10.9pps to 43.0%) driven by lower costs and increased ARPU. The company expects ARPU to reach Rs. 300 in long-term, driven by new connections and upgradation of 2G/3G to 4G. With strong growth in broadband connections and postpaid customers, we reiterate our BUY rating on the stock with a revised target price of Rs. 693 based on SOTP methodology
Bharti Airtel continues to report a gain in revenue market share with stable KPI across and also enjoys a comfortable leverage vis-à-vis peers. We note that while the AGR issue is sub-judice, fund raising has ensured it would be able to serve the same. With a resilient performance amid challenging times, Airtel is one the better placed telecom players. We maintain our BUY rating on the stock with a DCF based target price of Rs 700/share. The target price increase is expected to be largely led by superior medium term growth over the next three to four years, driven by a favourable industry structure.
Valuation – Maintain Buy with a revised PT of Rs. 610: We have fine-tuned our earnings estimates for FY2020E/FY2021E as revenue beat estimates, addition of 4G customers stayed strong and on expectation of pricing sanity in the environment. We have introduced FY2022E numbers in this note. The budgetary estimates indicated that the government has not considered penalty, interest and interest on penalty in the revenues from the telecom operators for FY2021, which is a relief for the incumbents. Further, the recent fund-raising of $3 billion has alleviated the concerns over viability at certain extent as the company is now better positioned to pay AGR dues. We remain positive on Bharti, considering its steady EBITDA performance in a tough environment, scope for growth in 4G subscribers, and improving free cash flows. Hence, we maintain our Buy rating on the stock with a revised price target (PT) of Rs. 610.
BHARTI has already turned FCF positive (post-interest cost), which, in our view, is its major strength. Increasing EBITDA, declining capex and subsequent deleveraging should improve valuation. Further, it has raised INR210b through QIP/FCCBs which should cushion the risk of AGR liability. We assign EV/EBITDA of 11x to India wireless biz and 6x to Africa biz on FY22E to arrive a TP (SOTP) of INR620 (prior: INR575). Maintain Buy. Our higher multiple to India wireless biz captures expected gains from growing market share (given VIL’s weak position) and potential government relief.
Given the aforementioned strengths, we maintain our positive stance on BHARTI with a target price of INR425, ascribing 12x EV/EBITDA to the India business and 5x to the Africa business (given low trading multiples). While rising EBITDA, deleveraging and improving FCF position have protected the stock even during the adverse external scenario, fund raising for penalties toward AGR case remains a concern for BHARTI. Maintain Buy.
Maintain Buy with a revised PT of Rs. 540: We have tweaked our revenue estimates for FY2020E/FY2021E on account of the recent tariff hike of 15- 50% and anticipation of pricing sanity in the environment. With this tariff increase, we expect a blended ARPU improvement of 20-23% translate into ~Rs. 3,300 crore and ~ Rs. 8,500 crore boosts in EBITDA in FY2020E and FY2021E, respectively. However, we await RJio’s plan-wise details as it could affect the dynamics of the industry. We believe there could be possibilities of further consolidation in the industry to two formidable players, if the government does not provide any relief on the adjusted gross revenue (AGR) case. It would be net beneficial for Bharti as it is well placed to gain the revenue market from the weaker telcos. We continue to remain positive on Bharti, considering its steady EBITDA performance in a tough environment, scope for growth in 4G subscribers, moderation in capex intensity and improving FCF position. Hence, we maintain our Buy rating on the stock with a revised price target (PT) of Rs. 540.
We continue to believe that AGR led outflow is a key risk but given the lack of clarity of the overall impact, we do not incorporate the same in our estimates. Conversely, further stress on account of AGR verdict for Vodafone would render it near bankrupt. Thus, it would also provide optionality value to Bharti through revenue share grab in such case. We highlight that notwithstanding the recent AGR related issue, Bharti Airtel has reported a relatively stronger retention of its revenue market share with stable KPI across and also enjoys comfortable leverage vis-à-vis peers. With a resilient performance amid challenging times, we maintain our BUY rating on the stock with a DCF based target price of Rs 425/share.
We maintain our TP at INR420, ascribing 11x EV/EBITDA to the India business and 5x to the Africa business, given the low trading multiples. While the steady EBITDA performance, deleveraging and the improving FCF position have protected the stock even in the current weak market, incremental upside would hinge on pricing actions, in our view. Maintain Buy.
Maintain Buy with a PT of Rs. 390: We have tweaked our earnings estimates for FY2020E/FY2021E owing to better-than- expected operating numbers, with the shift to IND-AS 116. Although strong India wireless business performance q-o-q is positive, the sustainability of this growth momentum needs to be watched given an intense competition. We believe the proceeds from Africa IPO and planned divestment of tower business stake would provide Bhartifinancial flexibility to further reduce net debt/EBITDA and also support cash flows. Given Bharti’s resilience in a tough environment, continuedimprovement in ARPU for the last two consecutive quarters and scopefor growth in 4G subscribers, we maintain our Buy rating on the stockwith a price target (PT) of Rs. 390.
We maintain our TP at INR420, ascribing 11x EV/EBITDA to the India business and 5x to the Africa business, given the low trading multiples. While the steady EBITDA performance, deleveraging and the improving FCF position have protected the stock even in the current weak market, incremental upside would hinge on pricing actions, in our view.Maintain Buy.
While the pricing uptick at industry level is still away, we highlight that Bharti Airtel is well placed to tackle the industry pressure with an apt strategy of focusing on high paying customers. We believe Bharti with a relatively nimble balance sheet post rights issue of ~| 25000 crore, Africa monetisation through pre IPO stake sale (~US$1.45 billion) as well as IPO fund raise of US$750 million, coupled with further potential of deleveraging, can remain one of the major players in Indian telecom. We now incorporate the Ind-AS 116 effect and Tata Tele customers/revenues base in our estimates. With resilient performance amid challenging times for second consecutive quarter, we now upgrade it to BUY (vs. HOLD earlier) with a DCF based target price of | 400/share.
Given that typically pre-IPO happens at a discount to the IPO price, we were expecting the IPO price to be higher than that in the pre-IPO rounds. At FY21E EBITDA of USD1.6b – factoring 10% CAGR over FY19-21, the IPO is priced at EV/EBITDA of 4.4x/4.8x at the lower/higher end of the band, much lower than our estimate of 7x. We have yet not adjusted our numbers but expect this to exert pressure on the company’s valuation. We maintain our Buy rating with SOTP-based target price of INR400.
Maintain Buy with a revised PT of Rs. 390: Although India wireless revenue as well as EBITDA growth on sequential basis is a positive surprise during the quarter, the sustainability of this growth momentum needs to be monitored in the coming quarters given the higher competitive intensity environment. We believe the planned value unlocking of its holdings in its subsidiaries and divestment of tower business stake wouldprovide financial flexibility to reduce net debt/EBITDA level to around 2.6x (recent rights issue proceeds are expected to reduce this ratio to3.4x) and provide cash flow support. Given theresilient performance in a tough environment and some signs of stability in India wireless business, we maintain our Buy rating on the stock with a revised price target (PT) of Rs. 390.
We believe Bharti with a relatively nimble balance sheet (vis-à-vis peers), can remain one of the major players in Indian telecom. We now incorporate the dilution from rights issue. We also bake in IUC impact as well as improvement in ARPU led by post- paid price hike. Post ~15% run up in stock price since our last update, we now assign a HOLD rating (vs. Buy earlier) with a revised target price of Rs 400 (based on DCF based methodology). Quicker industry repair and inability of new player to deleverage remains an upside risk to our call.
In our view, BHARTI has multiple moving levers in place – (a) a rebound in India wireless business, (b) fund raising plans and (c)peaking out of capex – which should help prune the ballooned net debt and make it self-sufficient. We have factored in an INR250b rights issue and ~15% reduction in capex (with an upward bias) in FY20. This will reduce cash burn and net debt-to-EBITDA to INR77b and 3.5x in FY20 versus ~INR200b and 4.3x, respectively, in FY19. Incrementally, the Africa IPO and the Bharti Infratel stake sale could drive additional deleveraging. The stock is attractively priced at 7x FY21E EBITDA. Maintain Buy with an SOTP-based target price of INR410.
Rightsissuetoimprovebalancesheet,maintain Buy: We have fine-tuned our earnings estimates for FY2020E on account of better-than-expected operating performance and have introduced FY2021E numbers in this note. Although better- than-expected sequential India wireless revenue growth is a positive surprise during the quarter, the sustainability of this growth momentum needs monitoring in the coming quarters. Despite the steep dilution, the recent fund-raising plan through rights issue would allow Airtel to de- leverage the balance sheet in bringing down net debt/EBITDA to 3.1x. Further, planned equity raise from Africa IPO and divestment of tower business stake would further provide financial flexibility to limit the rising of net debt/EBITDA level, which could reduce interest cost. Given the resilient performance in terms of market share in a tough environment, we maintain our Buy rating on the stock with a revised price target (PT) of Rs. 350.
Cash burn could reduce on lower capex intensity and interest cost BHARTI has incurred cumulative capex of ~INR750b over the last three years, which includes that toward 87.3k broadband site adds to 164.9k sites in Dec’18. We believe that capex intensity has peaked out now (expect capex of INR210b for FY20/21 v/s INR305b for FY19). Consequently, lower cash burn in FY20/21 and reducing interest cost due to lower debt should turn FCF positive to ~INR43b by FY21 (v/s cash burn of INR169b FY19E).
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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