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Accumulate Bharti Airtel, target of Rs 903: Angel Broking

Posted on: May 26th, 2009 and is filed under Brokerage Recommendations.

Angel Broking has recommended an accumulate on Bharti Airtel with a price target of Rs 903 in its report dated May 25, 2009.

“Bharti Airtel is India’s leading provider of GSM-based mobile services with 96.7 million subscribers at the end of April 30, 2009. In fact, in May, the company crossed 100 million subscribers. Bharti Airtel, in order to acquire a 49% stake in MTN Group, would have to fork out a gross of USD 6.8 billion at ZAR 86 per MTN share. On the other hand, the company would see an inflow of USD 2.9 billion from MTN Group as part payment towards purchase of a 36% post-transaction economic interest in Bharti. Thus, the net cash outflow required would be to the tune of approximately USD 3.9 billion.”

“MTN Group is a South Africa-based communication service provider offering cellular-based services and business solutions. MTN has operations in 21 countries across Africa and the Middle East and is one of the largest emerging market mobile operators globally. Bharti Airtel is likely to trade volatile until the final result of the discussions between the two parties is out. Nonetheless, we believe this is a bold and necessary move being attempted by Bharti and investors would have to be patient and take a longer-term approach to reap the fruits of such a deal. We recommend an ‘Accumulate’ on Bharti with a target price of Rs 903,” says Angel Broking’s report.

source: Moneycontrol

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