Accumulate Bharti Airtel, target of Rs 792: P Lilladher

Prabhudas Lilladher has recommended an accumulate rating on Bharti Airtel with a price target of Rs 792 in its March 31, 2009 research report. “Bharti Airtel highlighted the pullout of freebies by Rcom in the first 90 days of their launch & sighted reasons that such freebies is not a sustainable model to lure subscribers over the long term. Engagement of such freebies over the longer term would impact the profitability of operator employing such schemes more than the incumbents. The recent IUC cut from Rs 0.3 to Rs 0.2 effective April 1, 2009, would have a marginal impact in FY10 (Rs 500 million) which can be easily absorbed. However, the effect of such pass through’s by new rollouts in their aggressive schemes is yet to be seen.”

“Bharti is expected to report revenue & EBIDTA CAGR of 15% over FY09-FY11 period. Superior subscriber profile, healthy balance sheet, higher visibility of cash flows and absence of Mobile Number Portability (MNP) regime places Bharti as our top pick in the sector. Moreover, with 91 milliom wireless subscribers, Bharti would continue to demonstrate leadership in plans innovation and leverage the scale benefits.”Accumulate” with a price target of Rs 792,” says Prabhudas Lilladher’s research report.

Tags: accumulate, Bharti Airtel, P Lilladher

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