Bharti Airtel Ltd is world’s leading provider of telecommunication services with presence in 16 countries across Asia and Africa. It had over 444 million customers across its operations at the end of September 2018.
Outlook and Valuation: We believe near-term challenges will persist in India’s mobility segment considering Reliance Jio’s aggressive push to grab subscriber market share. Though ARPU is expected to remain under pressure in the near term due to downtrading of subscribers, it is expected to recover in the medium to long term considering ongoing consolidation in the sector and industry repair, which will help Airtel drive market share gains. We believe deleveraging of balance sheet with USD1.25bn equity infusion in the Africa business will help company meet rising investment in network. Further, higher data consumption driven by increasing smartphone penetration & investments in up-gradation and expansion of network towers and increase in content consumption will drive next phase of growth for Bharti Airtel. Hence, we recommend ‘BUY’ rating on the stock with a TP of Rs. 329 based on SOTP methodology.
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