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Motilal Oswal Report
Bharti Airtel Ltd. reported a steady quarter. Consolidated Ebitda grew 5% QoQ, aided by 4%/6% growth in India mobile revenue/Ebitda on a healthy 3.3% increase in average revenue per user.
Despite high capex (India capex of Rs 105 billion, doubled in last five-six quarters), free cash flow increased to Rs 24 billion from Rs 7.9 billion QoQ, led by strong operating cash flow. Subsequently, net debt declined by Rs 38 billion.
In the near term, Bharti Airtel could see soft earnings growth and subdued FCF due to high opex and limited potential for a tariff hike, market share gain and 4G led mix benefits.
However, over the next two three years, Bharti Airtel is well poised to gain from sector consolidation and tariff hikes. Reiterate our 'Buy' rating on the stock.
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