“Bharti Airtel’s revenue and EBITDA numbers were inline with our estimates however PAT was lower as forex loss hit the net profit. The company reported net sales of Rs 18739cr, marginal growth of 1% QoQ. EBITDA stood at Rs 6233cr, increased by 5% over Q3FY12. The company reported healthy operating margin improvement of 110bps QoQ to 33.3% on account of curtailed operating cost. Net profit for the quarter was Rs 1006cr. Net profit margin dipped 10bps to 5.4% as depreciation & amortization increased. Also the company incurred forex loss of Rs 132 crs in Q4FY12 which dented net profitability. We believe Bharti will continue to post strong revenue growth on the back of increasing subscriber base, higher in data revenue which will help to improve ARPUs and volume growth in Africa business. However stretched balancesheet and regulatory overhang will drag the valuation. The company enjoys leadership position in India and Africa operations are showing steady margin improvement. After steep correction in stock price, it is available at attractive valuations. Maintain BUY.”
“The company reported 1% revenue growth on sequential quarter in spite of seasonally weak quarter. This growth was driven by 3% subscriber growth and 1% increase in ARPU. Company’s net subscriber base stood at 181.2mn at the end of Q4FY12. ARPU increased from Rs 187 to Rs 189. MoUs increased 3% QoQ to 431mnS from 419mns in Q3FY12. Africa posted revenue growth of 1.3% QoQ led by 4.5% increase in subscriber base to 53.1mn. MVAS improved by 10bps sequentially to 14.3%. In spite of increase in monthly churn to 8.8% from 7.8%, the company reported healthy net subscriber growth. We believe steady subscriber addition and ARPU improvement driven by increased contribution from data services will help to increase net sales in FY13E. Operating margins improved by 110bps QoQ to 33.3% on account of curtailed operating expenses. Africa business reported increase in EBITDA margins by 350bps from 24.3% to 27.8% showing signs of improvement. The management guided strong operating margins to continue in both India and Africa market.”
“Q4FY12 was a strong quarter for Bharti reporting growth in all the parameters. We believe the company is well placed to capture new opportunities in voice as well data segment. Africa business has been showing steady growth in terms of revenue as well as margins. With recent regulatory announcement, the stock has shown steep correction. However strong fundamentals of the company are intact. The stock is trading at 6.7x EV/EBITDA to its FY13E earnings. We maintain our BUY recommendation on the stock with a target price of Rs 370,” says KRChoksey research report.
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