Buy Bharti Airtel, target of Rs 866: IIFL
IIFL has maintained its buy rating on Bharti Airtel with a target price of Rs 866 in its May 26,2009 research report.
“Bharti and MTN yesterday announced a revised arrangement for a potential transaction that would result in Bharti owning a 49% stake in MTN. For Bharti, this transaction would result in 57% equity dilution and a cash outflow of US$4bn. Bharti-MTN would become one of the largest telcos in emerging markets. A deal would give Bharti an entry into the African market, which is similar in size and has low penetration levels (except in South Africa). The vast increase in size would enable it to negotiate better prices on network deals. Additionally, Bharti’s tight leash on cost and capital efficiency could help MTN reduce costs. We reckon the transaction would lead to 9% earnings dilution for Bharti without accounting for synergies. This, in our view, is already reflected in the price; we maintain ‘BUY’, target of Rs 866,” says IIFL’s research report.
source: Moneycontrol
Tags: Airtel for short term, bharti aritel, hot stocks, iifl, NSE Tips, short term view bharti
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