10 May 2017
4QFY17 Results Update | Sector: Telecom
Bharti Airtel
Buy
BSE SENSEX
30,248
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm
Free float (%)
S&P CNX
9,407
BHARTI IN
Well invested, poised for growth
3,997.3
1,490.2 / 23.1
Better cost management in a tough operating environment
401 / 284
Consol. EBITDA drops 7% QoQ, but 3% above estimate:
Consol. revenue fell 6%
6/11/-16
QoQ (-12.1% YoY) to INR219.3b, while consol. EBITDA declined 7.3% QoQ (-13.7
1335
YoY) to INR78.6b (3% above estimate). RJio’s free usage plan led to a drop of
32.9
CMP: INR373
TP: INR430 (+15%)
Financials & Valuations (INR b)
FY17 FY18E
Y/E Mar
Net Sales
954.7 943.6
EBITDA
353.3 326.8
NP
44.4
25.1
EPS (INR)
11.1
6.3
EPS Gr. (%)
-6.4
-43.4
BV/Sh. (INR)
168.8 173.8
RoE (%)
6.7
3.7
RoCE (%)
5.4
4.8
P/E (x)
33.5
59.3
P/BV (x)
2.2
2.1
FY19E
1,043.1
371.9
45.8
11.5
82.4
184.1
6.4
5.6
32.5
2.0
Estimate change
TP change
Rating change
6%/10% QoQ in India wireless revenue/EBITDA to INR129.7b/INR47.9b. India
EBITDA was 7% above estimate due to lower discretionary cost. Despite Africa
revenue declining 6% QoQ to INR50.5b, EBITDA grew 6% (4.7% beat) led by cost
efficiencies. PAT fell 30% QoQ (-69% YoY) to INR4.7b on lower EBITDA. For FY17,
consol. EBITDA rose 4% YoY to INR353b, led by 4% growth in India wireless EBITDA.
Lower-than-expected decline in data revenue:
Data revenue saw a lower-than-
anticipated decline of 11% QoQ (7% beat), as volumes partly offset the 32% data
price decline. Overall India wireless ARPU declined 8%/19% QoQ/YoY to INR158.
Voice revenue fell 4.8% QoQ to INR92.5b (1% below estimate). Voice traffic grew
15% QoQ to 330b min, led by higher incoming traffic from RJio. This impacted India
voice RPM, which declined by a steep 17% QoQ to INR0.243/min.
Huge capacity build-up, getting ready to capture growth avenues:
With huge
spectrum and network investment, Bharti’s focus is to create ample data capacity to
match RJio’s offerings. Management highlighted its focus on improving the data
market share (currently at ~35%), and aims to be the key beneficiary of market
disruption. As competitive intensity bottoms out in 3-4 quarters, long-term ARPU
accretion should bode well for Bharti.
Maintain Buy with a revised TP of INR430:
We broadly maintain our EBITDA
estimate, factoring in a 7% decline in FY18 and 14% growth recovery in FY19. We
believe that as the market bottoms out in next 3-4 quarters, the stock can provide
8-10% FCF yield on 15% rise in EBITDA and annual capex reduction of 10%. Maintain
Buy
with a revised TP of INR430, based on our SOTP valuation, assigning 8x to India
ex-tower, 3x to Africa business and 15% discount to our Bharti Infratel’s valuations.
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Aliasgar Shakir
(Aliasgar.Shakir@motilaloswal.com); +91 022 3982 5423
Jay Gandhi
(Jay.Gandhi@MotilalOswal.com); +91 22 6129 1546

Bharti Airtel
4QFY17 earnings call highlights
India performance
Data ARPU declined 17% YoY, with increased value offerings to subscribers.
India wireless margin was at 36.9% in 4QFY17.
DTH grew 10.4% due to some residual demonetization impact.
Depreciation and amortization cost has increased due to step-up of spectrum
and network investments in India.
Airtel DTH launched Airtel Internet TV - hybrid set-top box offering online and
linear television content.
We have not seen a substantial increase in churn through MNP, but share of
wallet is impacted. Subscriber consumption is coming at a low price.
Overall 15% voice volume growth and 30% data volume growth indicate that
some of volume from free usage has come back.
Continue to evaluate energy cost and AMC cost reduction, which has reduced
network cost. 70-80% of subscription is through EKYC, which has reduced SG&A
cost.
Payment banks loss is due to marketing and launch cost, sales and distribution
and acquisition cost. The decoupling from mobile business to others segment is
to explain the nascent stage business separately v/s the core mobile business.
Industry
In India, the telecom industry disruption has hastened consolidation. New
operator’s predatory pricing is hurting the industry.
In the short- to medium-term, predatory pricing is impacting all stakeholders in
the telecom market, including government with lower receipts.
Predatory pricing by new subscribers is negatively impacting the industry. India
is at the cusp of data growth, and Bharti is well placed (led by its spectrum and
network position) to take benefit of industry growth.
Smartphone penetration growing to 600-700m, which will drive data growth
and increase ARPUs. However, in the short term, there should be ARPU
compression.
There is an opportunity to accelerate market share even when tariffs are coming
down. Management is confident that in the long term, the ARPU construct will
go up.
85-90% of new smartphones are 4G (priced at INR4,000-5,000). 4G feature
phones may come in a couple of months. Market share of new 4G devices for
Bharti is ~35%. At the time of new operator’s launch, the share had reduced, but
it is now recovering. Many programs are run to make this metric move positively
through distribution channel and device OEM partners. Bharti continues to
attract subscribers, whose wallet share is lost/reduced.
On VoLTE feature phones, it needs to be seen how market dynamics and
competition behave.
The market share of the new operator is likely to be higher on 4G, but Bharti is
focused on ensuring its own market share.
Telecom is heavily taxed sector (e.g. license fee, service tax). Will be proposing
the government to reduce taxes, spectrum costs and also provide leeway in
postponing deferred spectrum payments. Hopeful that a prudent decision will
2
10 May 2017

Bharti Airtel
be taken. This is due to the key factor that bedrock of economic growth will be
led by healthy broadband network and investment.
Currently on VoLTE, the strategy is to wait and watch. If it is at INR2,000-2,500,
it may not be attractive as smartphones are available at INR4,000-4,500. If it is
provided on subsidy, then India is a country where locks are easily broken, so
the subsidy may not help retain subscribers.
As bundling of data and voice services are offered, pricing will become
irrelevant, and ARPU will be the key focus.
Most small telco’s operating as value players are witnessing a poor
performance.
Business Outlook
Optimizing cost and retaining premium subscribers is management’s key priority
in the current hyper-active market.
Post the spectrum acquisition with Tikona and Telenor, Bharti will have
significant increase in spectrum holding, including 2300mhz spectrum across
India.
Bharti holds 126 3g+4g carriers, including Tikona and Telenor spectrum. This is
the largest data holding in the market.
Bharti’s quality of network strength should allow it to retain high-value
subscribers.
Continue to focus on all segments through mobile, TV and broadband offerings.
Once data consumption habit takes root, it will be easy to raise rates. In the long
term when there is price equilibrium, taking price increase will be relatively
easy.
Management is focused to cut opex and improve capex productivity in several
areas. Management believes this is once in a lifetime opportunity to grab
market share. Will focus on cost efficiency to improve EBITDA.
Home broadband has seen significant growth, and DTH has done relatively well.
V Fiber network roll out is growing steadily.
Enterprise business is sticky due to the hassles of switching vendor. Thus, there
is low competitive risk. The focus is on reducing the cost of delivery.
Quality of infra and fiber on the ground will be the priority for any broadband
business acquisition.
Does not have the capacity to match RJio’s volumes, but has the spectrum to
scale it to much higher level. Over next four quarters, capex is largely focused
toward fiber and 4G rollout, with minimal investments on 2G and 3G. Will be
chasing capacity, but supply will not be far ahead of demand.
1-2 cities 2G-3G spectrum will be refarmed in the near term. In FY18-19, a bunch
of cities may be refarmed, and the key trigger point is when pure voice
subscribers are reducing significantly.
Reducing energy cost through multiple ways like solar, shift of sites from
outdoor to indoor.
Mobile broadband subscriber growth is arising out of two massive programs. 1.)
New 4G handset 2.) Attract back subscribers who shifted to free usage through
targeted offerings.
Fiber sharing and active infra sharing in rural areas are key areas of cost
optimization.
3
10 May 2017

Bharti Airtel
Africa performance
In Africa, consolidation in weaker markets will continue: In Ghana, the merger
with Tigo will provide cost synergies.
Airtel brand is among Top 10 brands in Africa as per Brand Africa.
Shed unprofitable voice revenue in Africa which has led to lower revenue but
improvement in EBITDA. EBITDA margin expanded due to the war on waste.
Turned PBT positive for the 1
st
time in FY17. The focus is on quality subscriber
acquisition.
Africa tower sale was done to improve efficiency through tower sharing and
reduce capex. In India, not looking to sell stake in Bharti Infratel.
In Africa, the company continues to improve quality of revenue and cost
reengineering to improve margin. There is further opportunity for cost savings.
Capex, leverage, divestment
Capex guidance in FY18 maintained in line with FY17 level at USD3b.
Out of USD3b capex, USD2.5b will be incurred in India and USD500m in Africa.
Management does not expect capex to move significantly from the current
guidance. Bharti’s spectrum position is very robust. It has massive amount of
spectrum that can be used to provide many years of growth. Network capex
require modular investment based on data growth.
If there is a pressure on leverage due to capex intensity, we may explore sale of
Bharti Infratel stake.
10 May 2017
4

Bharti Airtel
Story in Charts
Exhibit 1: India mobile KPIs
Mobile ARPU (INR)
Mobile MoU (mins)
Mobile RPM (p)
Source: Company, MOSL
Exhibit 2: Bharti India: YoY mobile traffic growth (%)
Exhibit 3: Bharti India: Mobile RPM trend (incl data)
YoY RPM (%)
5
0.92
0.76
0.64
0.53
-1
-2
Mobile RPM (INR)
7
-1
8
-12
8 7 9 10 8 8 6 5 5 5 5 5 7 7 9 11 8 11 14 24
0.44 0.44 0.43 0.44 0.47 0.47 0.42 -20
0.33 0.36
-21 -18 -16 -17 -16
Source: Company, MOSL
Source: Company, MOSL
Exhibit 4: Bharti India: Mobile data traffic and pricing
Data traffic (b MB)
35
32
Data revenue per MB (p)
26 25 24
Exhibit 5: Bharti India: Data revenue & contribution to
wireless rev
Data revenue (INR b)
Data revenue (% of wireless)
24 25 23
22 23 23
22
19
16 18
29 29 30 29 29 28 28 27 27 27
23 22
20 18
12
7 9
5 6 7
4
12
10 11
14
Source: Company, MOSL
Source: Company, MOSL
10 May 2017
5

Bharti Airtel
Exhibit 6: Bharti India: Mobile churn rate per month (%)
Exhibit 7: Bharti vs Idea: QoQ India mobile traffic growth (%)
Bharti QoQ growth
Idea QoQ growth
15
5
2
5
1 4
8
6
4
7
5
6
4
3
1
2 5
0
-1 -2
-3
5
4
-4
-2
9
5
5
3
3
2
4
-3
-5
1
9
4
-2
-2
Source: Company, MOSL
Source: Company, MOSL
Exhibit 8: India mobile revenue and EBITDA margin
India mobile revenue
35 36
EBITDA margin (%)
44 43
39 37
Exhibit 9: Africa revenue and EBITDA margin
Africa mobile revenue
26 27 26 25 26 27 26 25 24
24 22
EBITDA margin (%)
21 21 20
24 24
21 22 22
27
32 32 30 32 33 35
38 38 38 40 40 40 40 41
Source: Company, MOSL
Source: Company, MOSL
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)
Source: Company, MOSL
Source: Company, MOSL
Proportionate
EBITDA (INR b)
275
56
Fair Value
(INR b)
2,147
418
168
1,014
3,747
Exhibit 12: Bharti Airtel: SOTP based on FY18
EBITDA
(INR b)
275
62
Ownership
100%
61%
90%
EV/EBITDA
7.8
3.0
Value/Share
537
104
42
254
430
373
15
Source: Company, MOSL
India SA business (excl. towers)
Tower business (15% discount to fair value)
Africa business
Less net debt
Total Value
Shares o/s (b)
CMP
Upside (%)
4.0
10 May 2017
6

Bharti Airtel
Exhibit 13: Bharti Airtel - Consolidated Segment wise Summary as per IFRS (INR m)
4QFY16
Revenue
Mobile India
Telemedia
Enterprise
Passive Infrastructure
South Asia
Others (incl South Asia)
Africa
Eliminations
Consolidated Revenue
EBITDA
Mobile India
Telemedia
Enterprise
Passive Infrastructure
South Asia
Others (incl South Asia)
Africa
Eliminations
Consolidated EBITDA
EBITDA margin (%)
Mobile India
Telemedia
Enterprise
Passive Infrastructure
Mobile South Asia
Africa
Consolidated EBITDA margin
Depreciation and amortization
Operating income
Other income and share of JV/Associate
Net finance cost
Proforma Profit Before Taxes
Exceptional Items
Proforma Tax
Effective Tax Rate (%)
Proforma Profit After Tax
Proforma Minority Interest
Proforma Net Profit
146,525
6,586
23,666
14,148
4,388
8,626
64,511
-18,854
249,596
58,616
2,798
8,043
7,088
288
2,272
14,296
-2,279
91,122
40.0
42.5
34.0
50.1
6.6
22.2
36.5
48,163
42,959
3,129
17,010
29,078
2,999
10,789
37.1
15,290
2,095
13,195
3QFY17
138,365
7,025
27,050
15,292
2,454
9,393
53,551
-19,774
233,357
52,986
3,414
8,287
7,291
162
3,039
12,680
-3,043
84,815
38.3
48.6
30.6
47.7
6.6
23.7
36.3
48,350
36,465
3,487
19,356
20,596
2,040
11,841
57.5
6,715
1,678
5,037
4QFY17
129,719
6,785
25,769
16,017
977
9,594
50,476
-19,991
219,346
47,873
3,323
9,424
7,943
-108
782
13,387
-4,024
78,600
36.9
49.0
36.6
49.6
-11.0
26.5
35.8
49,418
29,182
2494
19,162
12,514
6,055
1,753
14.0
4,706
972
3,734
YoY%
-11.5
3.0
8.9
13.2
-77.7
11.2
-21.8
6.0
-12.1
-18.3
18.8
17.2
12.1
-137.4
-65.6
-6.4
76.5
-13.7
-310bps
649bps
258bps
-51bps
-1757bps
436bps
-67bps
2.6
-32.1
-20.3
12.7
-57.0
-83.8
-2309.5
-69.2
-53.6
-71.7
QoQ%
-6.2
-3.4
-4.7
4.7
-60.2
2.1
-5.7
1.1
-6.0
-9.6
-2.7
13.7
8.9
-166.6
-74.3
5.6
32.2
-7.3
-139bps
38bps
593bps
191bps
-1760bps
284bps
-51bps
2.2
-20.0
-28.5
-1.0
-39.2
-85.2
-4348.3
-29.9
-42.1
-25.9
4QFY17E
129,115
6,917
26,239
15,480
1,963
9,598
51,815
-18,756
222,371
44,804
3,337
7,740
7,381
-196
3,102
12,370
-2,345
76,193
v/s Est (%)
0.5
-1.9
-1.8
3.5
-50.2
0.0
-2.6
6.6
-1.4
6.9
-0.4
21.8
7.6
-45.1
-74.8
8.2
71.6
3.2
34.7
220bps
48.3
72bps
29.5
707bps
47.7
191bps
-10.0
-103bps
23.9
265bps
34.3
157bps
50,204
-1.6
25,989
12.3
3,504
-28.8
16,480
16.3
13,013
-3.8
0
5,335
-67.1
41.0
-2699bps
7,678
-38.7
906
7.3
6,772
-44.9
Source: Company, MOSL
10 May 2017
7

Bharti Airtel
Exhibit 14: India Mobile: Operating Metrics
4QFY16
India - Wireless KPIs
Wireless traffic (b min)
Voice subscribers (m)
Data subscribers (m)
Voice revenue (INR b)
Data revenue (INR b)
RPM (p)
ARPU (INR)
MOU (min)
Data Traffic (b MB)
RPMb (p)
Monthly churn (%)
Voice RPM (p)
Non-voice revenue contribution
Data revenue contribution
308.0
251.2
58.2
102.4
33.6
46.8
194
415
147
22.9
3.3
33.3
28.9
23.3
3QFY17
330.3
265.9
54.9
97.2
30.9
41.1
172
419
172
18.0
4.1
29.4
28.4
22.8
4QFY17
381
274
57.4
92.5
27.5
33.5
158
471
225
12.2
3.6
24.3
27.5
21.5
YoY%
23.7
8.9
-1.5
-9.7
-18.2
-28.4
-18.9
13.4
53.4
-46.7
36bps
-27.0
-145bps
-178bps
QoQ%
15.3
2.9
4.5
-4.8
-11.1
-18.5
-8.4
12.4
31.0
-32.1
-50bps
-17.5
-92bps
-123bps
4QFY17
349
272
57
93.4
25.6
36
157
432
174
14.7
3
26.8
26.2
20.2
v/s Est (%)
9.2
0.7
0.4
-0.9
7.3
-7.7
0.5
8.9
29.7
-17.2
88bps
-9.3
131bps
130bps
Source: Company, MOSL
Exhibit 15: Bharti Africa: Quarterly Performance (INRm)
Revenue (INR m)
EBITDA (INR m)
EBITDA margin (%)
EOP Subs (mn)
MOUs
RPM exVAS (US cents)
RPM incl VAS (US cents)
Voice revenue (USD m)
Data revenue (USD m)
ARPUs (USD)
Total Minutes (m)
Non Voice revenue contribution
4QFY16
64,511
14,296
22.2
80.6
143.2
1.9
2.7
664.1
285.1
3.9
34940
30.0
3QFY17
53,551
12,680
23.7
80.4
151.7
1.8
2.5
640.1
278.4
3.9
35913
30.3
4QFY17
50,476
13,387
26.5
80
141
1.8
2.6
612.1
275.9
4
33977
31.1
YoY%
-21.8
-6.4
436bps
-0.6
-1.6
-5.0
-3.6
-7.8
-3.2
-5.4
-2.8
3.4
QoQ%
-5.7
5.6
284bps
-0.4
-7.2
1.8
2.9
-4.4
-0.9
-5.1
-5.4
2.5
4QFY17
51,815
12,370
23.9
82
146
1.8
2.5
626.2
275.0
4
35469
30.5
v/s Est (%)
-2.6
8.2
265bps
-2.3
-3.3
2.3
3.1
-2.3
0.3
-0.5
-4.2
1.8
Source: Company, MOSL
10 May 2017
8

Bharti Airtel
Exhibit 16: Key assumptions and value drivers
Mobile segment
Mobile - India
Subs (m)
YoY (%)
Total voice traffic (b min)
YoY%
Total data traffic (b MB)
YoY%
Average Rev Per User (Rs/month)
YoY%
Minutes of Use/Sub/Month
YoY%
Mobile RPM (Rs)
YoY%
Voice revenue per min (p)
YoY%
Data revenue per MB (p)
YoY%
Voice revenue (INR b)
YoY %
Data revenue (INR b)
YoY %
Data revenue as % of total revenue
Mobile - Africa
Subs (m)
YoY (%)
Netadds per month (m)
ARPU (USD/month)
YoY (%)
EBITDA margin (%)
FY11
162
27
792
30
FY12
181
12
889
12
10
187.8
-7
431
-5
0.436
-1
37.3
-3
41.0
331
9
4
1
44
22
0.7
7.3
21.9
53
20
0.7
7.1
-3
26.5
FY13
188
4
965
9
72
621
185.1
-1
436
1
0.425
-2
35.3
-5
31.0
-24
341
3
22
445
5
64
20
0.9
6.3
-11
26.2
FY14
206
9
1030
7
151
109
193.9
5
436
0
0.445
5
36.8
4
29.0
-6
379
11
44
95
10
69
9
0.5
5.6
-11
26.1
FY15
226
10
1081
5
287
91
198.1
2
417
-4
0.475
7
37.4
2
27.2
-6
404
7
78
79
15
76
10
0.6
5.0
-10
22.7
FY16
251
11
1171
8
498
73
192.9
-3
409
-2
0.471
-1
34.1
-9
24.2
-11
400
-1
120
54
22
81
6
0.4
4.0
-21
21.1
FY17
274
9
1340
14
733
47
177.0
-8
426
4
0.416
-12
29.6
-13
17.7
-27
397
-1
129
7
23
80
-1
0.0
3.8
-5
24.0
FY18E
288
5
1662
24
1267
73
164.2
-7
493
16
0.333
-20
23.3
-21
10.9
-38
387
-3
138
6
25
87
8
0.5
3.8
0
26.4
FY19E
297
3
1722
4
2189
73
176.9
8
491
-1
0.361
8
22.0
-5
9.8
-9
379
-2
215
57
35
94
8
0.6
3.8
-1
26.9
201.1
-17.2
455
-1
0.442
-16.5
38.3
-19
303
5
Source: Company, MOSL
Exhibit 17: Business Mix
Revenue (INR b)
Mobile
Telemedia
Enterprise
Passive Infrastructure
Others (incl South Asia)
Africa
Total revenue
Eliminations and others
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)
Consolidated capex
YoY%
Capex/Sales (%)
FY11
363
36
41
86
10
131
668
-73
595
FY12
403
37
45
95
16
198
794
-80
715
20
137
16
8
0
(9)
53
204
-4
201
17.8
150
-46
21.0
FY13
431
36
53
50
32
240
842
-73
769
8
130
15
9
0
(12)
63
205
-5
200
-0.2
130
-13
16.9
FY14
467
39
63
51
41
272
934
-77
857
11
158
15
14
0
2
71
259
-6
254
26.8
175
34
20.4
FY15
520
44
67
54
43
269
998
-77
920
7
194
18
14
0
5
61
292
-5
287
13.0
210
20
22.8
FY16
561
25
97
56
49
251
1039
-76
963
5
219
11
30
26
8
53
347
-7
340
18.6
271
29
28.1
FY17
566
28
109
61
49
220
1032
-78
955
-1
227
13
34
29
10
53
365
-12
353
4.0
271
0
28.4
FY18E
562
29
111
67
45
216
1030
-86
944
-1
202
14
34
32
4
57
344
-17
327
-7.5
201
-26
21.3
FY19E
630
31
125
72
50
232
1139
-96
1043
9
235
15
39
35
5
62
391
-19
372
5.3
201
-26
19.3
127
16
10
0
(10)
29
172
-2
170
20.5
277
123
46.5
Source: Company, MOSL
10 May 2017
9

Bharti Airtel
Financials and Valuations
Consolidated - Income Statement
Y/E March
Total Income from Operations
Change (%)
Total Expenditure
% of Sales
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
PBT bef. EO Exp.
EO Items
PBT after EO Exp.
Total Tax
Tax Rate (%)
Minority Interest
Reported PAT
Adjusted PAT
Change (%)
Margin (%)
FY13
769,045
7.6
536,891
69.8
232,154
30.2
148,147
84,007
40,084
423
44,346
0
44,346
25,183
56.8
-88
19,251
19,251
-54.8
2.5
FY14
857,461
11.5
580,865
67.7
276,596
32.3
156,496
120,100
48,381
6,385
78,104
538
78,642
48,449
61.6
2,467
27,726
27,519
43.0
3.2
FY15
920,394
7.3
608,118
66.1
312,276
33.9
155,311
156,965
48,463
6,588
115,090
-7,960
107,130
54,047
50.4
1,248
51,835
55,779
102.7
6.1
FY16
965,321
4.9
625,259
64.8
340,062
35.2
174,498
165,564
68,865
9,501
106,200
14,505
120,705
59,368
49.2
6,495
54,842
47,471
-14.9
4.9
FY17
954,683
-1.1
601,386
63.0
353,297
37.0
197,730
155,567
76,974
10,336
88,929
-11,697
77,232
34,819
45.1
4,416
37,997
44,421
-6.4
4.7
FY18E
943,563
-1.2
616,721
65.4
326,842
34.6
208,252
118,590
84,789
9,342
43,143
0
43,143
15,100
35.0
2,920
25,123
25,123
-43.4
2.7
(INR Million)
FY19E
1,043,147
10.6
671,243
64.3
371,905
35.7
229,380
142,525
73,166
9,342
78,700
0
78,700
27,545
35.0
5,326
45,829
45,829
82.4
4.4
Consolidated - Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Minority Interest
Total Loans
Deferred Tax Liabilities
Capital Employed
Net Fixed Assets
Total Investments
Curr. Assets, Loans&Adv.
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Provisions
Net Current Assets
Appl. of Funds
E: MOSL Estimates
FY13
18,988
484,229
503,217
40,886
667,363
-45,935
1,165,531
1,286,663
77,098
170,001
1,109
67,824
16,078
84,990
368,231
356,719
11,512
-198,230
1,165,531
FY14
19,987
577,573
597,560
42,102
758,958
-45,777
1,352,843
1,406,145
155,308
207,692
1,422
62,441
49,808
94,021
416,302
404,533
11,769
-208,610
1,352,843
FY15
19,987
599,577
619,564
48,525
806,839
-44,392
1,430,536
1,501,440
170,357
226,519
1,339
67,252
11,719
146,209
467,781
459,472
8,309
-241,262
1,430,536
FY16
19,987
636,314
656,301
51,984
950,430
-32,382
1,626,333
1,817,263
114,498
270,173
1,692
73,106
37,087
158,289
575,601
565,925
9,676
-305,427
1,626,333
FY17
19,987
654,576
674,562
68,750
1,074,281
-18,791
1,798,802
1,528,712
146,746
263,758
488
49,838
12,817
200,614
502,439
477,889
24,550
-238,681
1,798,802
FY18E
19,987
673,156
693,142
71,670
1,054,989
-18,791
1,801,010
1,883,700
129,824
413,644
1,666
79,417
163,932
168,628
626,158
616,881
9,277
-212,515
1,801,010
(INR Million)
FY19E
19,987
712,441
732,428
76,996
1,033,768
-18,791
1,824,401
1,855,537
129,824
431,043
716
63,480
148,865
217,982
592,003
563,883
28,120
-160,960
1,824,401
10 May 2017
10

Bharti Airtel
Financials and Valuations
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Asset Turnover (x)
Debtor (Days)
Leverage Ratio (x)
Net Debt/Equity
FY13
4.8
41.9
125.9
0.9
22.9
FY14
6.9
46.0
149.5
1.8
30.2
FY15
14.0
52.8
155.0
2.2
19.9
26.7
7.1
2.4
2.5
7.3
0.6
9.2
5.8
6.5
0.6
27
1.0
FY16
11.9
55.5
164.2
1.4
11.9
31.4
6.7
2.3
2.5
7.1
0.4
7.4
5.9
6.2
0.6
28
1.2
FY17
11.1
60.6
168.8
1.0
12.7
33.5
6.2
2.2
2.7
7.2
0.3
6.7
5.4
5.5
0.5
19
1.4
FY18E
6.3
58.4
173.4
1.0
19.2
59.3
6.4
2.1
2.5
7.3
0.3
3.7
4.8
4.9
0.5
31
1.1
FY19E
11.5
68.8
183.2
1.0
10.5
32.5
5.4
2.0
2.3
6.4
0.3
6.4
5.6
6.1
0.6
22
1.0
0.3
3.8
3.1
3.3
0.7
32
1.1
0.5
5.0
3.8
4.2
0.6
27
0.9
Consolidated - Cash Flow Statement
Y/E March
OP/(Loss) before Tax
Depreciation
Interest & Finance Charges
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
Others
CF from Operating incl EO
(Inc)/Dec in FA
Free Cash Flow
(Pur)/Sale of Investments
Others
CF from Investments
Issue of Shares
Inc/(Dec) in Debt
Interest Paid
Dividend Paid
Others
CF from Fin. Activity
Inc/Dec of Cash
Opening Balance
Closing Balance
E: MOSL Estimates
FY13
47,853
148,148
45,187
-31,294
19,634
229,528
-1,829
227,699
-130,063
97,636
-56,568
-130
-186,761
-579
-24,026
-34,339
-5,538
17,203
-47,279
-6,341
7,652
16,078
FY14
78,643
156,496
58,788
-35,039
17,533
276,421
-14,095
262,326
-174,659
87,667
-36,886
-38,188
-249,733
67,956
14,252
-37,620
-6,735
-12,182
25,671
38,264
1,311
49,808
FY15
107,130
155,311
73,252
-46,111
-1,639
287,943
-11,925
276,018
-209,786
66,232
-11,649
954
-220,481
0
-72,451
-33,887
-21,399
31,210
-96,527
-40,990
39,575
11,719
FY16
120,705
174,498
85,042
-46,836
-4,172
329,237
-46,032
283,205
-270,967
12,238
68,060
56,871
-146,036
984
-117,833
-32,890
-15,304
45,582
-119,461
17,708
-73
37,087
FY17
77,232
197,730
95,466
-34,819
-143,025
192,584
3,707
196,291
-271,203
-74,912
-32,249
-3,666
-307,118
-5,066
123,850
-95,466
-6,543
69,782
86,557
-24,270
37,087
12,817
FY18E
43,143
208,252
93,969
-15,100
124,949
455,213
0
455,213
-201,217
253,996
16,923
0
-184,294
0
-19,292
-93,969
-6,543
0
-119,804
151,115
12,817
163,932
FY19E
78,700
229,380
91,264
-27,545
-66,621
305,179
0
305,179
-201,217
103,962
0
0
-201,217
0
-21,221
-91,264
-6,543
0
-119,029
-15,067
163,932
148,865
10 May 2017
11

Bharti Airtel
Corporate profile
Company description
Bharti Airtel is an integrated telecom operator with
presence in wireless, fixed-line and broadband, long
distance, enterprise, 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.
Source: MOSL/Bloomberg
Exhibit 1: Sensex rebased
Exhibit 2: Shareholding pattern (%)
Mar-17
Promoter
DII
FII
Others
67.1
11.2
15.3
6.5
Dec-16
67.1
11.3
15.1
6.4
Mar-16
66.8
10.0
16.8
6.5
Source: Capitaline
Exhibit 3: Top holders
Holder Name
Life Insurance Corporation of India through
various accounts
Three Pillars Pte. Ltd.
ICICI Prudential Life Insurance Company
Limited
Dodge and Cox International Stock Fund
ICICI Prudential - Mutual Fund Units
% Holding
5.3
5.0
2.1
1.2
1.1
Source: Capitaline
Note: FII Includes depository receipts
Exhibit 4: Top management
Name
Sunil B Mittal
Gopal Vittal
Rajendra Chopra
Designation
Chairman
Managing Director &
CEO
Company Secretary
Exhibit 5: Directors
Name
Chua Sock Koong
Sheikh Faisal Thani Al-Thani
Bernardus Johannes Maria
Verwaayen
Dinesh Kumar Mittal
Shishir Priyadarshi
Name
Rakesh Bharti Mittal
Tan Yong Choo
Craig Edward Ehrlich
Manish Kejriwal
V K Viswanathan
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
ANB & Co
Chandrasekaran Associates
KPMG
R J Goel & Co
S R Batliboi & Associates LLP
Internal
Secretarial Audit
Internal
Cost Auditor
Statutory
Source: Capitaline
Type
Exhibit 7: MOSL forecast v/s consensus
EPS
(INR)
FY17
FY18
FY19
MOSL
forecast
11.1
6.3
11.5
Consensus
forecast
11.0
9.9
12.0
Variation (%)
1.4
-36.1
-4.1
Source: Bloomberg
10 May 2017
12

Bharti Airtel
NOTES
10 May 2017
13

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Bharti Airtel
Disclosure of Interest Statement
Analyst ownership of the stock
No
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No
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BHARTI AIRTEL
Motilal Oswal Securities Ltd
10 May 2017
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