Buy Bharti Airtel, target Rs 480: Equity99

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It’s consolidated net debt increased to Rs 95,228.5 crore compared with Rs 91,713.9 crore YoY. The net debt/EBITDA ratio has increased to 3.23 times versus 3.01 times in Q4FY17, says Sumit Bilgaiyan, Founder of Equity99.

Bharti Airtel has posted its lowest quarterly profit in nearly 15 years, but it's far ahead of our expectations. Airtel posted a consolidated net profit of Rs 83 crore in Q4FY18 against Rs 373 crore in Q4FY17.

The company takes a hit from Reliance Jio-led low tariffs and a cut in international termination rates (ITR).

Share Market tips

On operational parameters, mobile data traffic has increased by 505% YoY to 1,616 billion megabytes (MB) in Q4FY18. India revenue slipped 7.5% YoY on an adjusted basis to Rs 14,796 crore but African business grew at 10.7% due to strong growth in data and Airtel money transaction value. EBITDA is down 11% YoY to Rs 7,000 crore which is better than what we have projected.

Debt is still a big overhang on Bharti Airtel. It’s consolidated net debt increased to Rs 95,228.5 crore compared with Rs 91,713.9 crore YoY. The net debt/EBITDA ratio has increased to 3.23 times versus 3.01 times in Q4FY17. The net debt/equity ratio is at 1.37 times against 1.28 times on a QoQ basis.

Overall, we are satisfied with the numbers and Airtel continued to consolidate its leadership position this quarter. We have a buy rating with a target of Rs 480.

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Disclaimer:-The views and investment tips expressed by investment experts are their own. Ripples Advisory advises users to check with certified experts before taking any investment decisions.

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