bharti airtel_ india mobile broadly in-line; africa drags yet again– detailed report
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7/23/2019 Bharti Airtel_ India Mobile Broadly in-line; Africa Drags Yet Again– Detailed Report
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29 April 2015
4QFY15 Results Update | Sector: Telecom
Bharti AirtelBSE SENSEX
27,396
Bloomberg
Equity Shares (m)
M.Cap. INR b/USD b
52‐Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val INRm/Vol ‘000
Free float (%)
S&P CNX
8,286
BHARTI IN
3,997.4
1,599/25.7
426/304
7/‐4/‐2
1867/5032
34.6
CMP: INR401
TP: INR460 (+15%) Buy
India mobile broadly in‐line; Africa drags yet again4QFY15 EBITDA marginally below estimates: BHARTI’s 4QFY15 consolidated
EBITDA grew 10% YoY and 3.4% QoQ to INR80.5b (our estimate: INR81.7b). While
India mobile EBITDA performance continued to remain strong, growth at the
consolidated level was dragged down by sharp declines in Africa and enterprise
business. Revenue grew 3.6% YoY but declined 0.9% QoQ to INR 230.2b (our
estimate: INR239.6b). Proforma PAT increased 18% YoY but declined 18% QoQ to
INR14.15b (our estimate: INR19.16b). Reported PAT of INR12.55b included
INR1.59b exceptional net loss primarily related to restructuring activities.
India mobile ‐ Continued strong EBITDA growth; voice RPM under pressure: India
mobile revenue grew 11% YoY/2% QoQ to INR134.1b. EBITDA grew 23% YoY/6%
QoQ to INR51.7b (our estimate: INR52.2b). Mobile traffic grew ~5% YoY for fifth
consecutive quarter while voice RPM declined 2.5% YoY (3.9% QoQ). Excl. impact
of reduction in termination charges, we estimate voice RPM decline of ~2.5% QoQ.
Data revenue grew 10% QoQ (17.6% contribution; 12% traffic growth).
Sharp decline in Africa performance: Africa EBIDTA declined 14% QoQ to
USD207m (our estimate: USD233m). Revenue declined ~9% QoQ, impacted by
~8% revenue‐weighted currency depreciation. Bharti has significantly stepped up
capex in Africa with FY15 capex up ~70% YoY to USD1.07b.
Net debt stable; significant ramp‐up in capex: Net debt remained largely stable
QoQ at INR668b. Consolidated capex stood at ~INR65b (28% capex/sales). FY15
capex stood at USD3.06b (vs revised guidance of USD2.6‐2.8b), up 75% YoY.EBITDA estimates largely unchanged: Our EBITDA estimates are largely
unchanged. We expect 11% consolidated EBITDA CAGR over FY15‐17E. BHARTI
trades at prop. EV/EBITDA of 7.3x FY16E. Maintain Buy with a target price of
Financials & Valuation (INR Billion)
Y/E Mar
Net Sales
EBITDAAdj.
fiAdj. EPS
Adj. EPS Gr
BV/Sh (INR)
RoE (%)
RoCE (%)
Div. Payout
Valuations
P/E (x)
P/BV (x)
EV/EBITDA
Div. Yield (%)
30.8
2.4
7.5
0.6
24.1
2.2
7.3
0.7
31.1
2.1
6.5
0.6
2015 2016E 2017E
920
51.8
13.0
84.9
7.9
6.6
20.0
999 1,090
66.4
16.6
28.0
9.5
6.6
16.2
51.4
12.8
‐22.6
6.8
5.7
19.6
312.6 351.6 382.2
167.1 182.6 194.2
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INR460 based on 6.5x 1‐yr fwd EV/EBITDA for India (ex towers), 4x EV/EBITDA for
Africa, and 15% discount vs TP for Bharti Infratel. We await management
commentary on significant step up in capex intensity as well as plans for further
expansion of data networks.
Estimate change
TP change
Rating change
Shobhit Khare ([email protected]); +91 22 3982 5428Investors are advised to refer through disclosures made at the end of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional‐Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Bharti Airtel
India & South Asia EBITDA up 7% QoQ
India & South Asia revenue grew 2% QoQ to INR170.2b (v/s our estimate of
INR173.5b).
EBITDA grew 7% QoQ to INR67.6b (v/s our estimate of INR67b).
EBITDA margin improved 160bp QoQ to 39.7% (v/s our estimate of 38.6%), led
7/23/2019 Bharti Airtel_ India Mobile Broadly in-line; Africa Drags Yet Again– Detailed Report
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by margin expansion in mobile, telemedia, and passive infrastructure segments.
India Mobile: EBITDA up 6% QoQ
Mobile revenue increased ~11% YoY and ~2% QoQ to INR134.1b (est of
INR136.9b).
Mobile EBITDA grew ~23% YoY and ~6% QoQ to INR51.7b (est of INR52.2b).
EBITDA margin improved ~360bp YoY and ~150bp QoQ to 38.6%.
Blended RPM increased 5.6% YoY but declined 2.4% QoQ to 47.5p. Voice RPM
declined 2.5% YoY and 3.9% QoQ to 36.2p.
Mobile traffic grew ~5% YoY and ~3.9% QoQ to 278b minutes, marginally above
our estimate of 275b minutes.
Data continued to grow strongly with traffic growth of 12% QoQ and data
revenue growth of 10% QoQ. Data contribution increased to 17.6% of revenue
in 4QFY15 from 16.2% in 3QFY15.
MOU per subscriber declined 4% YoY to 418 minutes (in line).
Mobile ARPU increased 1% YoY but declined 2% QoQ to INR198 (vs est of
INR206).
Blended monthly churn declined QoQ to 2.5%.
Africa: Currency depreciation continues to drag performance
Africa revenue declined ~9% QoQ to USD1,000m (v/s est of USD1,086m).
EBITDA declined 14% QoQ to USD207m implying EBITDA margin of 20.7% vs our
estimate of 21.5%.
Net loss increased 35% QoQ to USD183 led by forex loss
Total minutes increased 2% QoQ to 31b but RPM declined 11% QoQ.
Subscriber base increased 2% QoQ to 76.3m.
Net debt at INR668b; continued strong momentum in 3G site additions
Net debt remained largely flat QoQ at INR668b. 4QFY15 consolidated capex was
~INR65b (28% capex/sales) while FY15 capex stood at ~INR187b (20%
capex/sales).
While 2G site additions improved QoQ to ~3,600, 3G sites additions accelerated
to ~7,000.
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29 April 2015 2
Bharti Airtel
Story in Charts
Exhibit 1: India mobile KPIs broadly in‐line with estimates
M ob il e A RP U ( IN R) M ob il e M OU ( mi ns ) M ob il e R PM ( p)
47.2
48.6
47.5
50.0
47.5
45.0
42.5
40.0
Source: Company, MOSL
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Exhibit 2: Bharti India: YoY mobile traffic growth (%)
16
14
109
8
10 10
8 8
Exhibit 3: Bharti India: Mobile RPM trend (incl data)
YoY RPM (%)
1.87
Mobile RPM (INR)
7 2
76
5 5 5 5 5
51.17
‐21‐ 20 ‐ 18 ‐ 24 ‐ 17 ‐ 17 ‐ 17 ‐ 17 ‐ 1 ‐ 3
0.930.77
0.640.53 0.44 0.44 0.42 0.44 0.47 0.49 0.51
1.54
5
Source: Company, MOSL Source: Company, MOSL
Exhibit 4: Bharti India: Mobile data traffic
Data traffic (b MB)
25%
26%21%
14%
20 24 27 34
23%
16%
QoQ growth (%)
20% 19% 22%
14%12%
87
Exhibit 5: Bharti India: Data revenue contribution and ARMB
Data revenue per MB (p)
3532
4%
31
7%
11% 12%
7% 9% 10%
30
Data revenue (% of wireless)
29 29 30 28 28 27 27 27
5% 6% 18%14% 16%
13 16 39 47 56 68 77
Source: Company, MOSL Source: Company, MOSL
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29 April 2015 3
Bharti Airtel
Exhibit 6: Bharti India: Mobile churn rate per month (%)
7.27.9
8.8 8.8 8.5
5.9
3.2 3.2 3.22.7 2.4 2.7 3.1 2.7 2.5
7
5 ‐2
‐21
‐4‐6
7
Exhibit 7: Bharti vs Idea: QoQ India mobile traffic growth (%)
Bharti ‐ QoQ growth
9 8
5
54
5‐2
35
2
3
‐3
Idea ‐ QoQ growth
9
5 54
4
1
‐2
2
‐3
1
8
6.4
4
Source: Company, MOSL Source: Company, MOSL
Exhibit 8: India mobile revenue and EBITDA margin
India mobile revenue (INR b)
34.2 33.8 33.5
Exhibit 9: Africa revenue and EBITDA margin
38.6EBITDA margin (%)
34.9
34.1
36.5
37.1
Africa mobile revenue (USD m) EBITDA margin (%)
33.7
29.930.729.230.6
34.032.4
36.9
27.827.126.7 26.726.5 26.9 25.826.2 25.8 25.4 25.325.2
24.323.6
21.9
20.7
Source: Company, MOSL Source: Company, MOSL
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Exhibit 10: Bharti: Mobile cell site base and quarterly
additions
Cellsites ('000) Sites added ('000)
Exhibit 11: Consolidated net debt and net debt/EBITDA
Net Debt (INR b) Net Debt/EBITDA (x)
5.1
1.9
0.9 0.9 1.0 3.42.0 2.3
1.00.7
1.7
1.71.1
1.4
3.6
1.62.77
2.63
2.61 2.582.42 2.27
2.84 2.99 2.09
2.05 1.87
2.02 2.07
2.53 2.26 2.15
Source: Company, MOSL Source: Company, MOSL
29 April 2015 4
Bharti Airtel
Bharti Airtel: SOTP based on FY17
Proportionate
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EBITDA(INR b)
India business (excl. towers)
Tower business (15% discount to fair value)
Africa business
Less net debt
Total Value
Shares o/s (b)
CMP
Upside (%)
284
65
Ownership EBITDA(INR b)
100% 284
72%
90% 59
EV/EBITDA
6.5
4.0
Fair value(INR b)
1,847
545
235
801
1,826
Value/Sh
462
136
59
200
460
400
15
Source: MOSL
4.00
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29 April 2015 5
Bharti Airtel
Bharti Airtel ‐ Consolidated Segment wise Summary as per IFRS (INR m
4QFY14* 3QFY15* 4QFY15* YoY% QoQ% 4QFY15E
136,909
11,547
16,986
14,259
11,838
68,441
‐20,338
239,642
52,155
v/s Est (%)
‐2.0
‐2.2
4.8
‐5.2
‐9.0
‐9.2
‐4.0
‐0.8
Revenue
Mobile 120,385 131,635 134,135 11.4 1.9
Telemedia 10,242 11,171 11,288 10.2 1.0
Enterprise 16,305 16,177 17,805 9.2 10.1
Passive Infrastructure 13,061 13,692 13,518 3.5 ‐1.3
Others (incl South Asia) 6,132 10,712 10,769 75.6 0.5
Africa 75,111 68,276 62,153 ‐17.3 ‐9.0
Eliminations ‐19,043 ‐19,492 ‐19,513 2.5 0.1
Consolidated Revenue 222,193 232,171 2 30,155 3.6 ‐0.9
EBITDA
Mobile 42,147 48,790 51,744 2 2.8 6.1
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4,690
3,719
6,841
1,023
14,686
‐1,400
81,713
38.1
40.6
21.948.0
21.5
34.1
40,635
41,078
737
9,324
32,491
12,725
39.2
19,766
60419,162
10.1
‐17.2
‐1.1
108.1
‐12.2
‐1.5
48bps
514bps
‐460bps208bps
‐70bps
88bps
‐5.5
2.5
231.2
108.0
‐22.6
‐16.2
3bps
‐26.7
‐43.4‐26.2
Telemedia 3,816 4,381 5,165 35.4 17.9
Enterprise 3,661 3,542 3,079 ‐15.9 ‐13.1
Passive Infrastructure 6,340 6,525 6,766 6.7 3.7
Others (incl South Asia) 431 1,003 2,129 394.0 112.3
Africa 18,145 14,953 12,901 ‐28.9 ‐13.7
Eliminations ‐1,474 ‐1,337 ‐1,279 ‐ 13.2 ‐4.3
Consolidated EBITDA 73,066 77,857 80,505 10.2 3.4
EBITDA margin (%)
Mobile 35.0 37.1 38.6 357bps 151bps
Telemedia 37.3 39.2 4 5.8 850bps 654bps
Enterprise 22.5 21.9 17.3 ‐516bps ‐460bpsPassive Infrastructure 48.5 47.7 50.1 151bps 2 40bps
Africa 24.2 2 1.9 20.8 ‐340bps ‐114bps
Consolidated EBITDA margin 32.9 33.5 35.0 209bps 144bps
Depreciation and amortization 39,444 38,015 38,401 ‐2.6 1.0
Operating income 33,622 39,842 42,104 25.2 5.7
Other income and share of JV/Associate 1,673 1,727 2,442 46.0 41.4
Net finance cost 9,911 10,450 19,391 95.7 85.6
Proforma Profit Before Taxes 25,384 31,119 25,155 ‐0.9 ‐19.2
Proforma Tax 13,306 13,145 10,668 ‐19.8 ‐18.8
Effective Tax Rate (%) 52.4 42.2 42.4 ‐1001bps 17bps
Proforma Profit After Tax 12,078 17,974 14,487 19.9 ‐19.4
Proforma Minority Interest 128 684 342 167.2 ‐50.0Proforma Net Profit 11,950 17,290 14,145 18.4 ‐18.2
#4QFY14/3QFY15/4QFY15 numbers adjusted for exceptional expense of INR2.3b/INR2.93b/INR1.59b on net basis
Source: Company, MOSL
India Mobile: Operating Metrics
India ‐ Wireless KPIs
Wireless traffic (b min)
RPM (p)
ARPU (INR)
MOU (min)
Monthly churn (%)
Voice RPM (p)
Non‐voice revenue contribution
Data revenue contribution
4QFY14
265
44.9
196
437
2.4
37.2
17.4
11.5
3QFY15
267
48.6
202
416
2.7
37.7
22.6
16.2
4QFY15
278
47.5
198
418
2.5
36.2
23.7
17.6
YoY%
4.9
5.6
1.0
‐4.3
9bps
‐2.5
630bps
617bps
QoQ%
3.9
‐2.4
‐1.9
0.5
‐14bps
‐3.9
111bps
137bps
4QFY15E
275
49.2
206
418
v/s Est (%)
1.1
‐3.6
‐3.6
0.0
Source: Company, MOSL
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Bharti Airtel
Bharti Africa: Quarterly Performance (USDm)
Revenue
EBITDA
EBITDA margin (%)
Depreciation and amortization
EBIT
Net finance cost
Profit Before Taxes
Total Tax
Profit After Tax (before minorities)
Minority Interest
Net Profit
Bharti Africa: KPIs
Mobile Subs (m)
Mobile ARPU (USD/month)
Total Minutes of Use (b mins)
Minutes of Use/Sub/Month
Effective Mobile RPM (US Cents)
4QFY14
1,145
290
25.3
226
64
188
‐124
68
‐192
‐22
‐170
3QFY15
1,103
241
21.9
190
51
167
‐115
41
‐156
‐20
‐136
4QFY15
1,000
207
20.7
176
31
249
‐218
‐5
‐213
‐30
‐183
YoY%
‐12.6
‐28.4
‐456bps
‐22.0
‐51.1
32.8
75.9
‐107.4
11.1
36.4
7.8
QoQ%
‐9.4
‐14.0
‐112bps
‐7.2
‐39.3
49.5
89.0
‐112.2
36.2
47.7
34.5
4QFY15E
1,086
233
21.5
196
37
113
‐76
42
‐118
‐30
‐88
v/s Est (%)
‐8.0
‐11.0
‐71bps
‐10.0
‐16.4
120.7
188.1
‐111.8
80.6
0.0
108.2
69.4
5.5
28.2
136
4.1
74.6
5.1
30.4
140
3.6
76.3
4.4
31.0
137
3.2
9.8
‐19.8
10.3
1.2
‐20.8
2.2
‐13.0
2.3
‐1.9
‐11.4
76.7
4.8
31.1
137
3.6
‐0.6
‐7.5
‐0.3
0.1
‐9.5
Source: Company, MOSL
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29 April 2015 7
9/29/2015 Bh ti Ai t l I di bil b dl i li Af i d t i D t il d R t
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Bharti Airtel
Key assumptions and value drivers
Mobile segment
Mobile ‐ India
Subs (m)
YoY (%)
Average subs (m)
YoY (%)
Net adds per month (m)
YoY (%)
Total mobile traffic (b min)
YoY (%)
ARPU (INR/month)
YoY (%)
MOU
YoY (%)
Mobile RPM (INR)
YoY (%)
Mobile EBITDA margin (%)
Mobile Capex (INR b)
Mobile Capex/sales (%)
Mobile ‐ Africa
Subs (m)
YoY (%)
Netadds per month (m)
ARPU (USD/month)
YoY (%)
Capex (USD b)
Capex/Sales (%)
EBITDA margin (%)
FY10
128
36
111
42
2.8
6
610
28
243
‐25
459
‐10
0.53
‐17
38.7
34
10
FY11
162
27
145
31
2.9
3
792
30
201
‐17
455
‐1
0.44
‐17
34.7
59
16
44
5
0.2
7.3
0.9
24
25
FY12
181
12
172
19
1.6
‐45
889
12
188
‐6
431
‐5
0.44
‐1
33.9
32
8
53
20
0.7
7.1
‐2
1.5
37
27
FY13
188
4
185
8
0.6
‐64
968
9
185
‐1
436
1
0.42
‐3
30.1
57
13
64
20
0.9
6.3
‐11
0.7
16
26
FY14
206
9
197
7
1.4
150
1,030
6
194
5
436
0
0.44
5
33.8
42
9
69
9
0.5
5.6
‐11
0.6
14
26
FY15
226
10
216
10
1.7
18
1,080
5
198
2
417
‐4
0.47
7
37.3
93
18
76
10
0.6
5.0
‐10
1.1
24
23
FY16E
236
5
231
7
0.9
‐50
1,151
7
201
2
415
0
0.49
2
39.7
88
16
FY17E
245
4
241
4
0.7
‐16
1,211
5
213
6
419
1
0.51
5
38.8
86
14
86 95
13 11
0.8 0.8
4.7 4.5
‐6 ‐4
0.9 1.0
20 20
21 21
Source: Company, MOSL
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29 April 2015 8
Bharti Airtel
Business Mix
Revenue (INR b)
Mobile
Telemedia
Enterprise
Passive Infrastructure
Others (incl South Asia)
Africa
Total revenue
Eliminations and others
FY10
331
34
45
71
6
0
487
‐68
FY11
363
36
41
86
10
131
667
‐72
FY12
403
37
45
95
16
198
794
‐80
FY13
431
36
53
50
32
240
842
‐73
FY14
467
39
63
51
41
273
934
‐77
FY15
520
44
67
54
43
269
998
‐77
FY16E
566
50
73
60
49
286
1083
‐84
FY17E
623
54
77
67
54
307
1183
‐92
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Consolidated revenue
YoY%
EBITDA (INR b)
Mobile
Telemedia
Enterprise
Passive Infrastructure
Others (incl South Asia)
Africa
Total EBITDA
Eliminations and others
Consolidated EBITDA
YoY%
Capex (INR b)
Mobile
Telemedia
Enterprise
Others (incl South Asia)
Passive infrastructure
Africa
Consolidated capex
YoY%
Capex/Sales (%)
418
13
128
15
13
25
‐10
0
170
‐2
168
11
34
10
12
16
12
0
83
‐41
20
595
42
126
16
10
32
‐10
29
202
‐3
200
19
59
8
4
14
23
36
143
71
24
715
20
137
16
8
36
‐9
53
240
‐3
237
19
32
8
2
9
14
76
140
‐2
20
769
8
130
15
9
23
‐2
63
236
‐4
233
‐2
57
3
1
11
11
39
122
‐13
16
857
11
158
15
14
23
2
71
282
‐5
278
19
42
4
1
13
8
38
106
‐13
12
920
7
194
18
14
26
5
61
318
‐5
313
13
93
5
1
12
10
65
187
76
20
999
9
225
24
15
28
6
60
358
‐6
352
12
1090
9
242
26
16
33
7
65
389
‐7
382
9
88 86
7 8
1 1
17 17
11 10
57 61
181 183
‐3 1
18 17
Source: Company, MOSL
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29 April 2015 9
Bharti Airtel
Summary of estimate change
FY15
Revenue (INRb)
Old
New
Change (%)
EBITDA (INRb)
Old
New
Change (%)
EBITDA margin (%)
Old
New
Change (bp)
Depreciation (INRb)
Old
New
Change (%)
Net finance cost (INRb)
Old
930
920
‐1.0
314
313
‐0.4
33.7
34.0
22bps
158
155
‐2
38
FY16E
1011
999
‐1.2
348
352
0.9
34.4
35.2
74bps
178
179
0
43
FY17E
1104
1090
‐1.3
379
382
0.8
34.3
35.1
72bps
208
209
1
57
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y g y g p
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NewChange (%)
Tax rate (%)
Old
New
Change (bp)
Net Profit (INRb)
Old
New
Change (%)
EPS (INR)
Old
New
Change (%)
4826
48
50
137bps
58
52
‐11.3
14.6
13.0
‐11.3
43‐1
49
48
‐68bps
63
66
4.8
605
54
54
20bps
52
51
‐0.6
15.8 12.9
16.6 12.8
4.8 ‐0.6
Source: Company, MOSL
29 April 2015 10
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Bharti Airtel
Financials and valuations
Income Statement
Y/E March
Revenues
Change (%)
Total Expenses
EBITDA
% of Gross Sales
Depn. & Amortization
EBIT
Net finance cost
Other Income
PBT
Tax
Rate (%)
Minority Interest
Adjusted PAT
Change (%)
E: Inquire Estimates
2011
594,672
42.1
395,007
199,664
33.6
102,066
97,598
21,813
998
76,783
17,790
23.2
‐1,475
60,468
‐32.6
2012
714,507
20.2
477,385
237,122
33.2
133,680
103,442
38,185
‐73
65,184
22,602
34.7
‐13
42,595
‐29.6
2013
769,045
7.6
536,466
232,579
30.2
148,148
84,431
40,085
3,506
47,852
25,183
52.6
‐88
22,757
‐46.6
2014
857,460
11.5
579,690
277,770
32.4
156,496
121,274
48,379
5,750
78,644
48,450
61.6
2,467
27,727
21.8
2015
920,394
7.3
607,779
312,614
34.0
154,713
157,901
48,464
‐838
108,599
53,904
49.6
2,860
51,835
86.9
2016E
999,451
8.6
647,898
351,553
35.2
178,903
172,651
42,777
4,844
134,718
65,188
48.4
3,167
66,364
28.0
(INR Million)
2017E
1,090,301
9.1
708,094
382,207
35.1
209,091
173,116
59,914
5,871
119,073
64,551
54.2
3,167
51,355
‐22.6
2018E
1,193,147
9.4
765,473
427,674
35.8
220,583
207,091
57,360
6,636
156,368
75,944
48.6
3,167
77,257
50.4
Balance Sheet
Y/E March
Share Capital
Add. Paid up Capital
Reserves
Net Worth
Loans
Minority Interest
Other Liabilities
Deferred Tax Liability
Capital Employed
2011
18,988
56,499
412,181
487,668
616,708
28,563
28,078
18,572
1,179,589
2012
18,988
56,499
430,626
506,113
690,232
27,695
31,920
18,861
1,274,821
2013
18,988
56,499
427,729
503,216
667,363
40,886
36,166
22,300
1,269,932
2014
19,987
123,456
454,117
597,560
758,958
42,102
47,247
26,894
1,472,761
2015
19,987
123,456
476,121
619,564
803,556
48,525
41,769
21,358
1,534,772
2016E
19,987
123,456
534,718
678,161
1,015,387
51,792
43,658
21,852
1,810,850
(INR Million)
2017E
19,987
123,456
577,962
721,405
1,012,259
54,958
45,815
22,506
1,856,943
2018E
19,987
123,456
638,007
781,450
856,040
58,124
48,139
23,223
1,766,976
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Gross Block
Less : Depreciation
Net Block
Other Non‐Current Assets
Curr. Assets
Inventories
Debtors
Cash & Bank Balance
Short‐term investments
Other Current Assets
Curr. Liab. & Prov.
Creditors
Other Current Liabilities
Net Curr. Assets
Appl. of Funds
E: MOSL Estimates
1,599,377
310,634
1,288,743
64,244
112,077
2,139
54,929
9,575
6,968
38,466
285,475
249,737
35,738
‐173,398
1,179,589
1,776,560
440,740
1,335,820
86,711
148,084
1,308
63,735
20,300
18,934
43,807
295,795
243,461
52,334
‐147,710
1,274,821
1,923,675
637,011
1,286,663
108,685
196,906
1,109
67,824
16,078
65,546
46,349
322,321
273,147
49,174
‐125,416
1,269,932
2,085,053
678,908
1,406,145
165,429
260,198
1,422
62,441
49,808
98,606
47,921
359,011
299,258
59,753
‐98,813
1,472,761
2,401,065
899,625
1,501,440
203,108
253,270
1,339
67,252
11,719
124,100
48,860
423,047
361,013
62,034
‐169,776
1,534,772
2,873,558
1,101,704
1,771,855
209,688
279,107
1,437
74,814
25,948
125,061
51,847
449,799
387,890
61,909
‐170,692
1,810,851
3,106,977
1,332,443
1,774,535
215,435
351,804
1,565
82,736
104,947
106,762
55,794
484,830
422,631
62,199
‐133,026
1,856,944
3,286,580
1,581,417
1,705,162
221,302
364,824
1,709
91,133
104,947
106,762
60,273
524,312
461,782
62,529
‐159,488
1,766,976
29 April 2015 11
Bharti Airtel
Financials and valuations
Ratios
Y/E March
Basic (INR)
2011 2012 2013 2014 2015 2016E 2017E 2018E
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EPS
Cash EPS
Book Value
DPS
Payout %(Incl.Div.Taxes)
Valuation (x)
P/E
Cash P/E
EV/EBITDA
EV/Sales
Price/Book Value
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
Turnover Ratios
Debtors (Days)
Asset Turnover (x)
Leverage Ratio
Net Debt/Equity (x)
15.9
42.8
136.1
1.0
6.3
11.2
46.5
140.7
1.1
10.0
6.0
45.0
143.4
0.6
10.0
7.0
46.6
161.8
2.1
30.4
13.0
51.7
167.1
2.6
20.0
16.6
61.4
182.6
2.7
16.2
12.8
65.2
194.2
2.5
19.6
19.3
74.5
210.1
3.1
16.1
25.1
9.3
10.6
3.6
2.9
0.2
35.6
8.6
9.4
3.0
2.8
0.3
57.0
8.6
8.5
2.6
2.5
0.5
30.8
7.7
7.5
2.5
2.4
0.6
24.1
6.5
7.3
2.5
2.2
0.7
31.1
6.1
6.5
2.2
2.1
0.6
20.7
5.4
5.4
1.9
1.9
0.8
12.6
8.7
8.1
6.2
4.2
4.3
4.7
5.0
7.9
6.6
9.5
6.6
6.8
5.7
9.6
7.3
34
0.78
33
0.65
32
0.71
27
0.79
27
0.80
27
0.78
28
0.78
28
0.89
1.2 1.2 1.1 1.0 1.0 1.2 1.0 0.8
Cash Flow Statement
Y/E March
Op.Profit/(Loss) bef Tax
Other Income
Interest Paid
Direct Taxes Paid
(Inc)/Dec in Wkg. Cap.
CF from Op.Activity
(inc)/Dec in FA + CWIP
(Pur)/Sale of Investments
CF from Inv.Activity
Issue of Shares
Inc/(Dec) in Debt
2011
199,664
998
‐21,813
‐37,970
120,819
261,699
‐848,290
45,451
‐802,839
9,624
514,810
2012
237,122
‐73
‐38,185
‐25,730
‐18,280
154,854
‐180,757
‐11,990
‐192,748
‐19,791
73,524
2013
232,579
3,506
‐40,085
‐31,431
21,448
186,018
‐98,991
‐58,141
‐157,132
‐21,242
‐22,869
2014
277,770
5,750
‐48,379
‐43,887
43,534
234,787
‐275,978
‐78,209
‐354,187
71,204
91,595
2015
312,614
‐838
‐48,464
‐55,281
‐4,989
203,043
‐250,008
‐15,049
‐265,057
‐13,854
44,598
2016E
351,553
4,844
‐42,777
‐65,172
12,523
260,972
‐449,317
‐961
‐450,278
2,355
211,831
(INR Million)
2017E
382,207
5,871
‐59,914
‐64,551
22,055
285,668
‐211,771
18,299
‐193,472
0
‐3,128
2018E
427,674
6,636
‐57,360
‐75,944
18,849
319,856
‐151,211
0
‐151,211
0
‐156,219
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Other Financing ActivitiesCF from Fin.Activity
Inc/(Dec) in Cash
Add: Opening Balance
Closing Balance
961525,395
‐15,748
25,323
9,575
‐5,11348,620
10,725
9,575
20,300
11,005‐33,106
‐4,222
20,300
16,078
‐9,669153,131
33,730
16,078
49,808
‐6,81923,925
‐38,089
49,808
11,719
‐10,651203,535
14,229
11,719
25,948
‐10,069‐13,196
78,999
25,948
104,947
‐12,426‐168,646
0
104,947
104,947
29 April 2015 12
Bharti Airtel
Corporate profile: Bharti Airtel
Company description
Bharti Airtel is an integrated telecom operator with
presence in wireless, fixed‐line and broadband,
lo ng distan ce, enter pr ise, and passive
infrastructure services across India, Sri Lanka,
Bangladesh and Africa. Bharti is the largest Indian
wireless operator with revenue market share of
~31% and population coverage of 86%. Bharti is the
fourth largest wireless company globally by
subscribers.
Exhibit 19: Sensex rebased
Bharti Airtel
500
450
400
350
300
250
Sensex ‐ Rebased
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Exhibit 20: Shareholding pattern (%)
Mar‐15
Promoter
DII
FII
Others
65.4
7.5
17.9
9.2
Dec‐14
65.4
7.4
17.5
9.7
Mar‐14
65.3
7.8
16.4
10.5
Exhibit 21: Top holders
Holder Name
Three Pillars Pte Ltd
Life Insurance Corporation Of India under various
Dodge and Cox International Stock Fund
Goldman Sachs (Singapore) Pte
ICICI Prudential Life Insurance Company Ltd
% Holding
5.0
4.7
1.5
1.4
1.3
Note: FII Includes depository receipts
Exhibit 22: Top management
Name
Sunil Bharti Mittal
Gopal Vittal
Designation
Chairman
Managing Director & CEO
Exhibit 23: Directors
Name
Sunil Bharti Mittal
Gopal Vittal
Rajan Bharti Mittal
Ajay Lal*
Manish Kejriwal*
Dinesh Kumar Mittal*
Craig Edward Ehrlich*
Name
Obiageli Katryn Ezekwesili*
Vegulaparanan Kasi Viswanathan*
Bernardus Johannes Maria Verwaayen*
Manoj Kohli
Tan Yong Choo
Chua Sock Koong
Sheikh Faisal Thani Al‐Thani
*Independent
Exhibit 24: Auditors
Name
S R Batliboi & Associates LLP
Chandrasekaran Associates
KPMG
R J Goel & Co
Type
Statutory
Secretarial Audit
Internal
Cost Auditor
Exhibit 25: MOSL forecast v/s consensus
EPS
(INR)
FY16
FY17
FY18
MOSL
forecast
16.6
12.8
19.3
Consensus
forecast
16.8
20.3
29.6
Variation
(%)
‐1.0
‐36.9
‐34.8
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29 April 2015 13
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Disclosures
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