HSBC rates Bharti Airtel as 'Overweight'

MUMBAI: HSBC has rated Bharti Aritel as ' Overweight' with a target price of Rs 488 per share after the telecom major announced results for quarter ended June 2011.

“Bharti reported mixed FY1Q12 results; in line with our estimates on operating parameters but disappointing at PAT due to forex loss,” the report said.

HSBC is of the view that after confirming the tariff hike in 19 circles out of 23, the company may go for another round of hikes if it doesn’t see any major disruption. The volatility in Africa is expected to remain for next couple of quarters.

“We value Bharti on mix of DCF and PE and value India business at Rs 521 and the Africa business at Rs 33. Key downside risks would be re-farming of spectrum in 900 MHz band and upside risks will be accelerated enrolment of subscribers for 3G services,” it added.