Bharti Airtel Q1 Results Review - Steady Earnings Growth Offsets Elevated Capex: Motilal Oswal

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A Bharti Airtel Ltd. store in Goregaon, Mumbai. (Photo: Snehal Galbaw/ Source: BQPrime)

BQ Prime's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer BQ Prime's subscribers an opportunity to expand their understanding of companies, sectors and the economy. 

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.

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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.

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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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This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

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