BSE Index Analysis, Securties , Standard Experts
Bharti Airtel :
Clawback Begins in India Wireless.
Reco : Buy
Cmp : 318
Target : 357
India Wireless:
We expect India volume growth (up 5% QoQ and 9% YoY in Q4) to sustain/improve as Bharti continues to compete for revenue market share through promotional tariffs in select circles and new initiatives in data market.
Though this will cap upside for voice RPM, higher additions of active subscribers will result in better volume growth. We expect higher traffic minutes and high-margin data services to drive network utilization, which in turn will improve margin (70 bps in FY13E). Bharti also increased its India capex guidance to USD 2-2.2 bn (vs. USD 1.4 bn in FY12), which would help (a) gain incremental market share in subscribers/ minutes through wider geo reach / capacity addition and (b) emerge as a leader in data services by investing in 3G/ 4G roll outs ahead of peers.
Africa business:
We expect further improvement in margin (290 bps in FY13E) to be led by (a) higher subscriber additions on increased network capacity (FY12 capex at USD 1.5 bn and FY13 at USD 1-1.1 bn ) and (b) benefits from IT/network outsourcing.
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