Buy Bharti Airtel, target price Rs 590: CLSA

CLSA has retained buy rating on Bharti Airtel and lowered target price to Rs 590 from Rs 680. Shares of Bharti Airtel ended down 0.4 per cent at Rs 404.05 on Tuesday while the BSE Sensex closed 692.79 points up (+2.67 per cent) at 26,674.03.

Bharti Airtel Ltd., incorporated in 1995, has a market cap of Rs 220431.79 crore.



Investment Rationale

Covid-19’s hit on Bharti Airtel is likely to be moderate, as medium-term growth would be led by December 2019’s prepaid tariff hikes, said CLSA. Also, Bharti Airtel and other telcos’ submissions to Trai on floor tariffs seek further 50-90 per cent increases, said CLSA. However, the brokerage has cut Ebitda estimates by 1-8 per cent as Bharti’s subscriber additions will be hit by the lockdown in India.

Financials

Bharti Airtel's key products/revenue segments include Service Revenue which contributed Rs 49589.50 crore to sales value (99.96 per cent of total sales) and Sale of Products which contributed Rs 18.50 crore to sales calue (0.03 % of total sales) for the year ending March 31, 2019.
For the quarter ended December 31, 2019, the company reported consolidated sales of Rs 21947.10 crore, up 3.86 per cent from last quarter sales of Rs 21131.30 crore and up 6.96 per cent from last year same quarter sales of Rs 20519.20 crore. The company reported net profit after tax of Rs -312.60 crore in the latest quarter.