Bharti Airtel is a complex business and volatility is likely to persist
Moneylife Digital Team 14 March 2013

According to Nomura, domestic pricing trends, regulations, and performance in Africa will be the key drivers for Bharti Airtel. In addition, 'newsflow’, which has become a key driver of the company’s share, price far more than fundamentals even, is likely to continue and the stock would remain range-bound, the research report said  

 
There are many different views for Bharti Airtel on competition, license auctions, Africa, Reliance Industries’ launch of 4G and data outlook. Nomura Research said expectations (from Bharti Airtel) are high, but confidence has taken a beating after two years of disappointing results and it should turn some time. 
 
“However, Bharti is a complex business to model and analyse, so volatility will likely persist. This may present trading opportunities into the results (including good 4Q13 results) and ‘newsflow’ will likely continue to be a key share price driver, but fundamentally we don’t think the stock is inexpensive, hence neutral (rating),” Nomura said in a research report. 
 
Nomura had maintained its ‘neutral’ rating on Bharti Airtel with a target price of Rs310 as against a closing price of Rs307 as on 25 February 2013. “Our target price is 10% below consensus due to operational and regulatory concerns. Domestic pricing trends, regulations, and performance in Africa will be the key drivers of Bharti Airtel, in our view,” it said.
 
Nomura said its analysts met with the management of the company as well as various domestic investors in India. Bharti Airtel management expects some increase in revenues per minute (RPM) during the March quarter, but was not sure how long it can be sustained.
 
Bharti Airtel also stated that most of its major renewals are between 2014 and 2016 and there is enough existing spectrum now—more supply than demand; hence pricing should be controlled going forward.
 
As per Nomura’s discussions with domestic investors, there was not much disagreement that Indian telcos would remain difficult to call on a short-term or a long-term view. “Amongst key concerns/questions (expressed by investors), it was largely on ‘views’ on regulations, domestic RPM outlook, spectrum pricing, data examples, capex and landscape post RIL launch,” Nomura said.
 
Comments
gopalanjanaki
1 decade ago
So far as Mobiles&broad bands service is pretty good
gopalanjanaki
1 decade ago
So far as Mobiles&broad bands service is pretty good
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