7 May 2019
4QFY19 Results Update | Sector: Telecom
Bharti Airtel
Buy
BSE SENSEX
38,277
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
S&P CNX
11,498
BHARTI IN
3,997
1410.3 / 20.3
380 / 254
1/7/-20
2338
32.9
2021E
918.0
312.5
-9.1
-1.8
NM
181.1
-1.0
3.3
NM
1.8
7.0
CMP: INR324 TP: INR410 (+26%)
India business stages a comeback
Financials & Valuations (INR b)
2019 2020E
Y/E Mar
Net Sales
807.8 835.2
EBITDA
258.2 268.1
-35.0 -25.9
PAT
-8.8
-5.0
EPS (INR)
NM
NM
Gr. (%)
BV/Sh (INR)
178.7 182.9
RoE (%)
-5.0
-3.1
RoCE (%)
-2.5
2.0
P/E (x)
NM
NM
P/BV (x)
1.8
1.8
EV/EBITDA (x)
9.3
8.3
Estimate change
TP change
Rating change
The picture is far more sanguine:
Bharti (BHARTI) bucked the competition-
driven downtrend of the past several quarters with a strong fourth-quarter
performance. Consol. EBITDA grew by a robust 7% QoQ to INR66b (5%
beat), with the margin expanding 150bp QoQ (200bp beat) to 32.2%, led by
a turnaround in the India wireless business margin (+410bp QoQ). However,
adj. net loss widened to INR12b (our estimate: INR7.2b) from INR10.4b in
the previous quarter. For FY19, consol. revenue/EBITDA/PAT declined by
2%/14%/63% YoY.
India wireless biz makes a strong comeback…:
One of the notable features
of the 4QFY19 results was the strong turnaround in the India wireless
business, where revenue increased 4% QoQ (3% beat). This can be
attributed to (a) a lesser churn and an accelerated shift of low-ARPU
subscribers to minimum recharge plans and (b) an improving incremental
broadband market share. Accordingly, EBITDA grew by a stellar 27% QoQ to
INR24.7b*. In USD terms, Africa revenue stood flat QoQ, but a sharp decline
in opex facilitated healthy 6% QoQ EBITDA growth.
…and the outlook appears favorable too:
Evidently now, ‘minimum
recharge’ is proving to be a prudent strategy. This, along with the increasing
shift of feature phone subscribers to smartphones and the thrust on
improving the MBB share (with re-launch of ‘Airtel Thanks’), augur well for
Bharti’s India wireless business. This is particularly comforting amid
expectations of a reduction in IUC gains and some additional subscriber
churn. Africa business, too, has been playing a key role in overall growth.
We, thus, largely maintain our estimate (FY19-21) of revenue/EBITDA CAGR
of 7%/10%.
Valuation view:
In our view, BHARTI has multiple moving levers in place –
(a) a rebound in India wireless business, (b) fund raising plans and (c)
peaking out of capex – which should help prune the ballooned net debt and
make it self-sufficient. We have factored in an INR250b rights issue and
~15% reduction in capex (with an upward bias) in FY20. This will reduce cash
burn and net debt-to-EBITDA to INR77b and 3.5x in FY20 versus ~INR200b
and 4.3x, respectively, in FY19. Incrementally, the Africa IPO and the Bharti
Infratel stake sale could drive additional deleveraging. The stock is
attractively priced at 7x FY21E EBITDA. Maintain
Buy
with an SOTP-based
target price of INR410.
*Due to the ongoing rights issue, Bharti has only released the statutory financials and not reported segmental
EBITDA/KPIs. Hence, we have deduced the segmental EBITDA from the segmental EBIT and depreciation workings.
Aliasgar Shakir – Research analyst
(Aliasgar.Shakir@MotilalOswal.com); +91 22 6129 1565
Hafeez Patel – Research analyst
(Hafeez.Patel@MotilalOswal.com); +91 22 6129 1568
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.
 Motilal Oswal Financial Services
Bharti Airtel
Consolidated Quarterly Performance
Y/E March
FY18
1Q
2Q
3Q
Revenue
2,19,581 2,17,769 2,03,186
YoY Change (%)
-14.0
-11.7
-12.9
Total Expenditure
1,41,997 1,38,549 1,28,498
EBITDA
77,584 79,220 74,688
Margins (%)
35.3
36.4
36.8
Depreciation
48,192 46,873 48,375
Net Finance cost
18,274 23,266 20,882
Other Income
3,698
3,907
2,950
PBT before EO expense
14,816 12,988
8,381
Extra-Ord expense
503
1,786
2,395
PBT
14,313 11,202
5,986
Tax
8,136
5,341
379
Rate (%)
56.8
47.7
6.3
Minority Interest
2,504
2,431
2,549
Reported PAT
3,673
3,430
3,058
Adj PAT
4,060
4,724
4,341
YoY Change (%)
-77.6
-67.8
-38.7
Margins (%)
1.8
2.2
2.1
(INR m)
4Q
Est.
FY19E Var (%)
2,08,135
-1.0
6.0
1,45,241 -3.8
62,894
5.4
30.2
197bp
53,319
28,983
-697
-20,105
NM
0
-20,105
NM
-8,042
40.0
-4,890
-7,173
NM
-7,173
NM
-959.7
-3.4
FY19
4Q
1,93,945
-11.6
1,24,646
69,299
35.7
48,991
18,293
2,401
4,416
3,247
1,169
-3,021
-258.4
3,361
829
834
-91.5
0.4
1Q
2,00,800
-8.6
1,33,542
67,258
33.5
51,452
21,266
2,610
-2,850
3,621
-6,471
-11,267
174.1
3,823
973
-3,004
NM
-1.5
2Q
2,04,225
-6.2
1,41,790
62,435
30.6
52,366
29,857
1,253
-18,535
1,449
-19,984
-22,476
112.5
1,304
1,188
-9,650
NM
-4.7
3Q
2,02,311
-0.4
1,40,131
62,180
30.7
54,723
19,448
-144
-12,135
-14,137
2,002
-1,824
-91.1
2,964
862
-10,408
NM
-5.1
4Q
2,06,022
6.2
1,39,706
66,316
32.2
54,934
25,323
855
-13,086
-20,221
7,135
1,374
19.3
4,689
1,072
-11,965
NM
-5.8
FY18
8,26,388
-13.4
5,25,597
3,00,791
36.4
1,92,431
80,715
12,956
40,601
7,931
32,670
10,835
33.2
10,845
10,990
13,960
-68.6
1.7
FY19
8,07,802
-2.2
5,49,613
2,58,189
32.0
2,13,475
95,894
4,574
-46,606
-29,288
-17,318
-34,193
197.4
12,780
4,095
-35,026
NM
-4.3
Valuation and view
Management’s strategy of minimum recharge plans has started showing results
– as evident in the strong 4Q performance.
We believe India wireless business should witness tailwinds from the re-launch
of ‘Airtel Thanks’ and the shift from 2G to 4G. However, reducing IUC gains may
partly offset the benefits.
Strong momentum in the Africa business should continue on the back of (a)
potential for increasing revenue market share in certain countries, (b) operating
leverage and (c) fillip from Airtel Money.
Consequently, we have largely maintained our estimates – revenue/EBITDA
CAGR of 7%/10% over FY20-21.
In our view, BHARTI has multiple moving levers in place – (a) a rebound in India
wireless business, (b) fund raising plans and (c) peaking out of capex – which
should help prune the ballooned net debt and make it self-sufficient. We have
factored in an INR250b rights issue and ~15% reduction in capex (with an
upward bias) in FY20. The stock is attractively priced at 7x FY21E EBITDA.
Maintain
Buy
with an SOTP-based target price of INR410.
Exhibit 1: Bharti Airtel — SOTP-based on FY21
EBITDA
(INR b)
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 (%)
160
114
Ownership
(%)
100%
54%
72%
Proportionate
EBITDA
(INR b)
160
82
EV/
EBITDA (x)
11
11
Fair Value
(INR b)
1,831
244
939
911
2,103
Value/
Share (INR)
357
48
183
177
410
323
27
Source: Company, MOFSL
5.1
7 May 2019
2
 Motilal Oswal Financial Services
Bharti Airtel
Exhibit 2: BHARTI — One-year forward EV/EBITDA band
14.0
12.0
10.0
8.0
6.0
4.0
EV/EBITDA (x)
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
11.8
9.3
6.5
7.9
5.7
9.3
Source: Bloomberg, MOFSL
Exhibit 3: Consolidated segment-wise performance (INR m)
4QFY18
Revenue
Mobile India
Telemedia
Enterprise
Passive Infrastructure
Digital TV
South Asia
Others (incl South Asia)
Africa
Eliminations
Consolidated Revenue
EBITDA
Mobile India*
Telemedia*
Enterprise*
Passive Infrastructure*
Digital TV8
South Asia*
Africa*
Eliminations*
Consolidated EBITDA
EBITDA margin (%)*
Mobile India*
Telemedia*
Enterprise*
Passive Infrastructure*
Digital TV*
Mobile South Asia8
Africa*
Consolidated EBITDA margin
Depreciation and amortization
Operating income
Other income and share of JV/Associate
Net finance cost
Profit Before Tax and Exceptional item
Exceptional Items
Tax expense
Effective Tax Rate (%)
Profit After Tax
Minority Interest
Net Profit
Adj. Net Profit
1,03,532
6,042
28,282
16,739
9,585
1,033
1,004
47,314
-19,586
1,93,945
29,428
3,001
11,418
8,144
3,701
66
19,698
-5,489
69,299
28.4
49.7
40.4
48.7
38.6
6.4
41.6
35.7
48,991
20,308
2,401
18,293
4,416
3,247
-3,021
-68.4
4,190
3,361
829
834
3QFY19
1,01,892
5,503
31,117
17,326
10,330
1,130
224
56,153
-21,364
2,02,311
19,498
2,583
9,874
8,510
3,826
42
24,342
-6,495
62,180
19.1
46.9
31.7
49.1
37.0
3.7
43.3
30.7
54,723
7,457
-144
19,448
-12,135
-14,137
-1,824
15.0
3,826
2,964
862
-10,408
4QFY19
1,06,323
5,536
30,039
16,704
10,505
1,124
37
55,115
-19,361
2,06,022
24,771
2,336
8,830
8,336
4,111
69
24,163
-6,337
66,316
23.3
42.2
29.4
49.9
39.1
6.1
43.8
32.2
54,934
11,382
855
25,323
-13,086
-20,221
1,374
-10.5
5,761
4,689
1,072
-11,965
YoY%
2.7
-8.4
6.2
-0.2
9.6
8.8
-96.3
16.5
-1.1
6.2
-15.8
-22.2
-22.7
2.4
11.1
4.3
22.7
15.4
-4.3
-513bps
-747bps
-1098bps
125bps
52bps
-27bps
221bps
-354bps
12.1
-44.0
-64.4
38.4
-396.3
-722.8
-145.5
5791.1
37.5
39.5
29.3
NM
QoQ%
4.3
0.6
-3.5
-3.6
1.7
-0.5
-83.5
-1.8
-9.4
1.8
27.0
-9.6
-10.6
-2.0
7.4
64.6
-0.7
-2.4
6.7
416bps
-474bps
-234bps
79bps
210bps
242bps
49bps
145bps
0.4
52.6
-693.8
30.2
7.8
43.0
-175.3
-2553.1
50.6
58.2
24.4
NM
4QFY19E
1,03,404
5,404
30,495
17,560
10,473
1,153
228
60,934
-21,516
2,08,135
19,626
2,537
9,677
8,625
3,770
36
22,458
-3,835
62,894
19.0
46.9
31.7
49.1
36.0
3.2
36.9
30.2
53,319
9,575
-697
28,983
-20,105
0
-8,042
40.0
-12,063
-4,890
-7,173
-7,173
v/s Est (%)
2.8
2.4
-1.5
-4.9
0.3
-2.5
-83.8
-9.6
-10.0
-1.0
26.2
-7.9
-8.7
-3.4
9.0
89.1
7.6
65.2
5.4
432bps
-474bps
-234bps
79bps
313bps
296bps
698bps
197bps
3.0
18.9
-222.7
-12.6
-34.9
NM
-117.1
NM
NM
NM
NM
NM
Source: MOFSL, Company
*Due to the ongoing rights issue, Bharti had only released the statutory financials for 4QFY19 and not reported segmental EBITDA/KPIs. Hence,
we have deduced the segmental EBITDA from the segmental EBIT and depreciation workings.
7 May 2019
3
 Motilal Oswal Financial Services
Bharti Airtel
Exhibit 4: Bharti Africa — Operating Metrics
Mobile Subs (m)
Mobile ARPU (USD/month)
Wireless traffic (b min)
Minutes of Use/Sub/Month
4QFY18
89.3
2.8
45
172
3QFY19
97.9
2.8
52
183
4QFY19
98.9
2.7
53
179
YoY%
10.7
-2.3
18
4
QoQ%
0.9
-2.3
1
-2
4QFY19E
99.9
3.0
54
183
v/s Est (%)
-1.0
-7.9
-2.7
-2.2
Source: Company, MOFSL
Exhibit 5: Summary of estimate change
FY20E
Revenue consolidated (INR b)
Old
New
Change (%)
EBITDA consolidated (INR b)
Old
New
Change (%)
EBITDA margin consolidated (%)
Old
New
Change (bp)
Net Profit (INR b)
Old
New
Change (%)
Adj. EPS (INR)
Old
New
Change (%)
856
835
-2.4
264
268
1.5
30.8
32.1
125.1
-22
-26
NM
-5.4
-5.0
NM
FY21E
939
918
-2.2
306
312
2.1
32.6
34.0
145.6
-11
-9
NM
-2.7
-1.8
NM
Source: Company, MOFSL
7 May 2019
4
 Motilal Oswal Financial Services
Bharti Airtel
Story in charts
Exhibit 6: Consol. revenue grew 2% QoQ; EBITDA margin expanded 150bp QoQ to 32.2% (INR b, %)
Consol revenue (INR b)
Consol EBITDA margin (%)
Exhibit 7: India mobile revenue grew 4% QoQ
Revenue (INR b)
EBITDA margin (%)
Exhibit 8: Africa revenue fell 2% QoQ (in INR terms)
Revenue (INR b)
EBITDA margin (%)
*Derived from EBIT and depreciation
Exhibit 10: Africa subs base grew 1% QoQ; ARPU fell 2%
QoQ
Subs (m)
Mobile ARPU (USD)
Exhibit 9: India mobile subs base stood at 284m (in 3QFY19)
Subs (m)
India Mobile ARPU (INR)
7 May 2019
5
 Motilal Oswal Financial Services
Bharti Airtel
Exhibit 11: India mobile total cell site base and quarterly
additions
Cell sites ('000)
3.6
1.4 1.6
1.9 1.7
1.1
2.9 3.0
1.9
1.3
1.8
0.9
0.3 0.6
1.9 1.6
QoQ Sites added ('000)
3.7
4.3
3.8 7.0
9.6
Exhibit 12: India mobile broadband sites base and quarterly
additions
Broadband sites ('000)
27.9
15.1
2.6 2.4 3.0 3.3 3.4 3.0
3.5
4.1
7.2
14.4
1.7
8.110.3
QoQ Sites added ('000)
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 13: Bharti Africa — PBT in constant currency (USD m)
Exhibit 14: Bharti Airtel – segmental capex trend (INR b)
India Wireless (%)
Other segments (%)
Africa (%)
Total capex (INR b)
100%
80%
60%
14 27 49 92 130 106 113 122 121 134
(23) (22) (20)
40%
20%
0%
100
80
60
40
20
0
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 15: Telemedia business revenue stood flat QoQ
Revenue (INR b)
EBITDA margin (%)
Exhibit 16: Digital TV business revenue grew 2% QoQ
Revenue (INR b)
EBITDA margin (%)
*Derived from EBIT and depreciation Source: Company, MOFSL
*Derived from EBIT and depreciation Source: Company, MOFSL
Exhibit 17: Enterprise business revenue fell 4% QoQ
Revenue (INR b)
EBITDA margin (%)
Exhibit 18: Passive Infra business revenue fell 4% QoQ
Revenue (INR b)
EBITDA margin (%)
*Derived from EBIT and depreciation Source: Company, MOFSL
*Derived from EBIT and depreciation Source: Company, MOFSL
7 May 2019
6
 Motilal Oswal Financial Services
Bharti Airtel
Exhibit 19: Consolidated net debt up by INR19b to INR1,105b due to high capex
Net Debt (INR b)
Net Debt/EBITDA (x)
Source: MOFSL, Company
Exhibit 20: Business Mix
Revenue (INR b)
India Mobile
Telemedia
Enterprise
Passive Infrastructure
Others (incl. South Asia)
Africa
Total revenue
Eliminations and others
Consolidated revenue
YoY%
EBITDA (INR b)
India Mobile
Telemedia
Enterprise
Passive Infrastructure
Others (incl. South Asia)
Africa
Total EBITDA
Eliminations and others
Consolidated EBITDA
YoY%
Consolidated EBITDA margin (%)
Capex (INR b)
Consolidated capex
YoY%
Capex/Sales (%)
FY14
467
39
63
51
41
272
934
-77
857
11
158
15
14
0
2
71
259
-6
254
27
32.3
175
34
20
FY15
520
44
67
54
43
269
998
-77
920
7
194
18
14
0
5
61
292
-5
287
13
33.9
210
20
23
FY16
561
25
97
56
49
251
1039
-76
963
5
219
11
30
26
8
53
347
-7
340
19
35.2
271
29
28
FY17
566
28
109
61
49
220
1032
-78
955
-1
227
13
34
29
10
51
364
-11
353
4
37.0
384
42
40
FY18
463
25
113
66
46
191
904
-78
826
-13
151
12
42
33
10
68
315
-14
301
-15
36.4
267
-30
32
FY19
416
22
125
68
47
215
892
-84
808
-2
93
11
40
33
13
95
285
-27
258
-14
32.0
349
30
43
FY20E
423
22
125
73
49
232
923
-88
835
3
94
9
35
36
18
101
294
-26
268
4
32.1
245
-30
29
FY21E
471
24
137
77
53
253
1015
-97
918
10
124
10
37
39
20
114
342
-30
312
17
34.0
225
-8
25
FY19 Segmental EBITDA has been derived from segmental EBIT and depreciation working
Source: Company, MOFSL
7 May 2019
7
 Motilal Oswal Financial Services
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 (%)
FY14
8,57,461
11.5
5,80,865
67.7
2,76,596
32.3
1,56,496
1,20,100
48,381
6,385
78,104
538
78,642
48,449
61.6
2,467
27,726
27,519
43.0
3.2
FY15
9,20,394
7.3
6,08,118
66.1
3,12,276
33.9
1,55,311
1,56,965
48,463
6,588
1,15,090
-7,960
1,07,130
54,047
50.4
1,248
51,835
55,779
102.7
6.1
FY16
9,65,321
4.9
6,25,479
64.8
3,39,842
35.2
1,74,498
1,65,344
69,135
10,513
1,06,722
21,741
1,28,463
59,533
46.3
8,163
60,767
49,101
-12.0
5.1
FY17
9,54,683
-1.1
6,01,386
63.0
3,53,297
37.0
1,97,730
1,55,567
76,974
10,336
88,929
-11,697
77,232
34,819
45.1
4,416
37,997
44,421
-9.5
4.7
FY18
8,36,879
-12.3
5,36,088
64.1
3,00,791
35.9
1,92,431
1,08,360
80,715
12,956
40,601
-7,931
32,670
10,835
33.2
10,845
10,990
13,960
-68.6
1.7
FY19
8,07,802
-2.2
5,49,613
68.0
2,58,189
32.0
2,13,475
44,714
95,894
4,574
-46,606
29,288
-17,318
-34,193
197.4
12,780
4,095
-35,026
-350.9
-4.3
FY20E
8,35,219
3.4
5,67,155
67.9
2,68,064
32.1
2,33,611
34,453
82,160
4,148
-43,560
0
-43,560
0
0.0
-17,658
-25,902
-25,902
-26.1
-3.1
(INR m)
FY21E
9,18,037
9.9
6,05,552
66.0
3,12,484
34.0
2,51,645
60,840
80,232
4,148
-15,244
0
-15,244
0
0.0
-6,179
-9,064
-9,064
-65.0
-1.0
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: MOFSL Estimates
FY14
19,987
5,77,573
5,97,560
42,102
7,58,958
-45,777
13,52,843
14,06,145
1,55,308
2,07,692
1,422
62,441
49,808
94,021
4,16,302
4,04,533
11,769
-2,08,610
13,52,843
FY15
19,987
5,99,577
6,19,564
48,525
8,06,839
-44,392
14,30,536
15,01,440
1,70,357
2,26,519
1,339
67,252
11,719
1,46,209
4,67,781
4,59,472
8,309
-2,41,262
14,30,536
FY16
19,987
6,47,706
6,67,693
54,981
10,04,526
-34,226
16,92,974
17,79,948
1,19,671
3,10,876
1,692
55,039
37,087
2,17,058
5,17,520
5,07,838
9,682
-2,06,645
16,92,974
FY17
19,987
6,54,576
6,74,563
68,750
10,72,877
-16,766
17,99,424
18,90,736
1,81,552
2,34,170
488
47,402
12,817
1,73,462
5,07,034
4,97,348
9,686
-2,72,865
17,99,424
FY18
19,987
6,75,357
6,95,344
88,139
11,13,335
-22,118
18,74,700
15,89,357
1,80,406
3,26,564
693
58,830
47,886
2,19,155
6,01,786
5,77,285
24,501
-2,75,222
18,74,700
FY19
19,987
6,94,235
7,14,222
1,35,258
12,54,283
-82,556
20,21,207
16,83,662
1,57,110
4,00,829
884
43,006
81,055
2,75,884
6,41,389
6,21,206
20,183
-2,40,560
20,21,207
FY20E
25,655
9,12,665
9,38,320
1,17,600
10,38,296
-82,556
20,11,661
21,16,046
1,10,878
4,19,450
747
48,525
76,535
2,93,644
6,34,713
6,08,695
26,018
-2,15,263
20,11,661
(INR m)
FY21E
25,655
9,03,601
9,29,256
1,11,421
9,96,806
-82,556
19,54,927
20,89,401
1,10,878
3,87,824
1,046
52,082
64,304
2,70,393
6,33,176
6,08,412
24,764
-2,45,352
19,54,926
7 May 2019
8
 Motilal Oswal Financial Services
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
FY14
6.9
46.0
149.5
1.8
30.2
FY15
14.0
52.8
155.0
2.2
19.9
FY16
12.3
55.9
168.8
1.4
10.8
FY17
11.1
60.6
168.8
1.0
12.7
29.1
5.3
1.9
2.5
6.4
0.3
6.6
5.3
5.4
0.5
18
1.3
FY18
3.5
51.6
173.9
1.0
43.8
92.5
6.3
1.9
2.9
7.5
0.3
2.0
4.6
4.5
0.4
26
1.3
FY19
-8.8
44.6
178.7
0.0
0.0
NM
7.2
1.8
3.1
9.3
0.0
-5.0
-2.5
-2.6
0.4
19
1.4
FY20E
-5.0
40.5
182.9
0.0
0.0
NM
8.0
1.8
2.7
8.3
0.0
-3.1
2.0
2.0
0.4
21
0.9
FY21E
-1.8
47.3
181.1
0.0
0.0
NM
6.8
1.8
2.4
7.0
0.0
-1.0
3.3
3.4
0.5
21
0.9
0.7
5.0
3.8
4.2
0.6
27
0.9
9.2
5.8
6.5
0.6
27
1.0
0.5
7.6
6.1
6.4
0.6
21
1.3
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: MOFSL Estimates
FY14
78,643
1,56,496
58,788
-35,039
17,533
2,76,421
-14,095
2,62,326
-1,74,659
87,667
-36,886
-27,955
-2,39,500
67,956
14,252
-37,620
-6,735
-12,182
25,671
48,497
1,311
49,808
FY15
1,07,130
1,55,311
73,252
-46,111
-1,639
2,87,943
-11,925
2,76,018
-2,09,786
66,232
-11,649
14,088
-2,07,347
0
-72,451
-33,887
-21,399
31,210
-96,527
-27,856
39,575
11,719
FY16
1,28,463
1,74,498
85,461
-46,836
-3,955
3,37,631
-58,208
2,79,423
-2,70,967
8,456
68,115
60,595
-1,42,257
984
-1,17,833
-32,890
-15,304
46,925
-1,18,118
19,048
-1,413
37,087
FY17
77,233
1,97,730
95,466
-31,587
-27,429
3,11,413
-19,104
2,92,309
-3,84,045
-91,736
-817
69,308
-3,15,554
1,245
9,353
-58,566
-9,168
52,866
-4,270
-27,515
17,635
12,817
FY18
32,670
1,92,431
93,255
-13,723
5,906
3,10,539
-12,001
2,98,538
-2,67,262
31,276
-33,322
40,326
-2,60,258
21
40,073
-44,041
-32,652
56,085
19,486
57,766
-9,880
47,886
FY19
-17,318
2,13,475
1,10,134
34,193
-35,439
3,05,045
-60,438
2,44,607
-3,48,616
-1,04,009
23,296
12,669
-3,12,651
0
1,40,948
-1,10,134
0
89,817
1,20,631
52,587
28,468
81,055
(INR Million)
FY20E
-43,560
2,33,611
1,00,258
0
-29,817
2,60,493
0
2,60,493
-2,45,000
15,493
46,232
19,418
-1,79,350
2,50,000
-2,15,987
-1,00,258
0
0
-66,245
14,898
61,637
76,535
FY21E
-15,244
2,51,645
98,330
0
17,858
3,52,589
0
3,52,589
-2,25,000
1,27,589
0
19,418
-2,05,582
0
-41,490
-98,330
0
0
-1,39,820
7,187
57,117
64,304
7 May 2019
9
 Motilal Oswal Financial Services
Bharti Airtel
NOTES
7 May 2019
10
 Motilal Oswal Financial Services
Bharti Airtel
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Securities Ltd. (MOSL)* is a SEBI Registered Research Analyst having registration no. INH000000412. MOSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
products. MOSL is a subsidiary company of Motilal Oswal Financial Service Ltd. (MOFSL). MOFSL is a listed public company, the details in respect of which are available on
www.motilaloswal.com.
MOSL is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock Exchange of India Ltd.
(NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India (MCX) & National Commodity & Derivatives Exchange Ltd. (NCDEX) for its stock broking
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http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report should
be aware that MOSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific merchant
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https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from
MOSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
or use would be contrary to law, regulation or which would subject MOSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state
laws in the United States. In addition MOSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together
with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment
services provided by MOSL , including the products and services described herein are not available to or intended for U.S. persons. This report is intended for distribution only to
"Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This
document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only
available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the
U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct
business with Institutional Investors based in the U.S., MOSL has entered into a chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International
Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
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Specific Disclosures
1 MOSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOSL has not received any compensation or other benefits from third party in connection with the research report
10 MOSL has not engaged in market making activity for the subject company
****************************************************************
****************************************************************
7 May 2019
11
 Motilal Oswal Financial Services
Bharti Airtel
The associates of MOSL may have:
- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Terms & Conditions:
This report has been prepared by MOSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent
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The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The
report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOSL will not treat recipients as
customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or
distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for
informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing
in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.
The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this
document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this
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expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade
securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and
should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alternations to this statement as may be required from time to time without any prior approval. MOSL, its associates, their directors and the employees may from
time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to
perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOSL. The views expressed are those of the analyst, and the Company may or
may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on,
directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or
entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject MOSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all
jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. Neither
the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue
or lost profits that may arise from or in connection with the use of the information.
The person accessing this information specifically agrees to exempt MOSL or any of its affiliates
or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSL or any of its affiliates or employees responsible for any such misuse
and further agrees to hold MOSL or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing
this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022-3980
4263; www.motilaloswal.com. Correspondence Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai- 400 064. Tel No: 022 3080
1000. Compliance Officer: Neeraj Agarwal, Email Id:
na@motilaloswal.com,
Contact No.:022-38281085.
Registration details: MOSL: SEBI Registration: INZ000158836 (BSE/NSE/MCX/NCDEX); CDSL: IN-DP-16-2015; NSDL: IN-DP-NSDL-152-2000; Research Analyst: INH000000412.
AMFI: ARN 17397. Investment Adviser: INA000007100. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670) offers PMS and Mutual
Funds products. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.: INP000004409) offers wealth management solutions. *Motilal Oswal Securities Ltd.
is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs, Insurance and IPO products. *Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. offers Real Estate
products. * Motilal Oswal Private Equity Investment Advisors Pvt. Ltd. offers Private Equity products.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench. The existing registration no(s) of MOSL would be used until receipt of new MOFSL registration numbers.
7 May 2019
12