BSE SENSEX
34,501
S&P CNX
10,571
Bharti Infratel
CMP: INR326
TP: INR346 (+6%)
Neutral
Bharti Infratel, Indus merger to produce a tower behemoth
25 April 2018
Update
| Sector:
Telecom
Stock Info
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
M.Cap. (INR b)
M.Cap. (USD b)
Avg Val, INRm
Free float (%)
BHIN IN
1,896.7
482 / 317
-11/-33/-28
624.7
9.4
1727.0
46.5
Financials Snapshot (INR b)
2018 2019E 2020E
Y/E Mar
Net Sales
144.9 145.1 152.8
EBITDA
63.8
59.3
61.7
NP
25.2
25.3
26.2
EPS (INR)
13.6
13.7
14.2
EPS Gr. (%)
-8.1
0.4
3.6
BV/Sh. (INR)
91.7
88.0
84.7
RoE (%)
15.6
15.2
16.4
RoCE (%)
13.6
11.8
12.9
P/E (x)
24.1
24.1
23.2
P/BV (x)
3.6
3.7
3.9
EV/EBITDA (x)
8.8
9.5
9.4
Shareholding pattern (%)
As On
Mar-18 Dec-17 Mar-17
Promoter
53.5
53.5
61.7
DII
2.3
2.3
1.7
FII
43.0
42.1
34.4
Others
1.2
2.1
2.3
FII Includes depository receipts
Stock Performance (1-year)
Bharti Infra.
Sensex - Rebased
490
440
390
340
290
Bharti Infratel (BHIN) announced that it will merge with Indus Towers. Post the
transaction, the merged entity is expected to be valued at an EV of INR926b. BHIN
and Vodafone would hold 37.2% and 29.4%, respectively, in the combined entity.
Other stakeholders Idea and Providence have an option to sell their 11.15% and
3.35% in Indus Towers for INR65b and INR19.6b, respectively.
Indus Towers’ acquisition value is at a 14% discount to BHIN. Moreover, BHIN could
benefit from an improved capital structure and RoCE, led by utilization of surplus
cash for acquiring Idea and Providence’s stake.
However, we see a risk of further pressure on BHIN’s EBITDA – beyond our estimate
of a 7% decline – in FY19 on the back of tenancy exits. Moreover, concerns about
excess industry supply remain.
Against this cautious backdrop, we maintain our Neutral rating. Our DCF-based target
price stands at INR346, implying EV/tenancy of INR2.7m
Merged entity to be valued at an EV of INR926b
BHIN announced that Indus Towers (wherein it holds a 42% stake) will be merged
with itself. The deal values Indus at an enterprise value of INR648b at the current
price, and at INR715b based on BHIN’s share swap value of INR363. Currently, BHIN
and Vodafone hold 42% each in Indus, while Idea and Providence hold 11.15% and
4.85%, respectively. Even as BHIN and Vodafone may continue holding their stakes
in the merged entity, Idea and Providence have the option to retain their stakes or
sell out at a 4% discount to the current price. Accordingly, we see three scenarios
under which the merger could be structured. Assuming Idea would sell its entire
stake and Providence sells a 3.35% stake, the merged entity should be valued at an
enterprise value of INR926b and at an equity value of INR870b (@ CMP of INR326),
as the cash will be utilized toward paying out INR65b and INR19.6b to Idea and
Providence, respectively. Consequently, BHIN and Vodafone would hold 37.2% and
29.4%, respectively, and Providence would hold 1.1% in the merged entity.
Indus deal at a 14% discount to current valuation
The deal values Indus at an EV/tower and EV/tenancy of INR5.2m and INR2.3m,
respectively, on FY18. This is at a 14% discount to BHIN’s current valuation.
Subsequently, BHIN’s EV/tower and EV/tenancy will decline by 7% to INR5.7m and
INR2.5m, respectively. The combined entity should operate 163,162 towers (~40%
market share) and 367,073 tenancies, with revenue and EBITDA of INR254b and
INR109b, respectively. Our implied EV/tenancy of INR2.7m implies a 10% upside to
our current TP of INR346.
Headwinds in the near term
We see multiple headwinds for the tower industry and BHIN over the next 4-6
quarters. (1) Management indicated that Vodafone-Idea merger may cut ~25,000
tenancies, which is 12% of the current tenancies. However, the figure could be
higher, considering Idea management’s guidance of a cut in 20% overlapping sites.
Aliasgar Shakir – Research analyst
(Aliasgar.Shakir@motilaloswal.com); +91 22 6129 1565
Hafeez Patel – Research analyst
(Hafeez.Patel@motilaloswal.com); +91 22 6129 1568
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.

Bharti Infratel
(2) The overall tower industry has huge supply, with ~4,50,000 towers and a less
than 1.5x tenancy rate. Deep-pocketed players like ATCs, which have ramped up
footprint through acquisitions, may turn aggressive. (3) Tower companies with long-
term contracts have seen limited impact from telcos’ cost efficiency measures,
which are taken to buffer the impact of falling ARPUs. However, beyond the next 4-6
quarters, the tower industry may see growth from site densification, rollout of micro
sites and IBS solutions, and smart city investments.
Maintain TP given the risks over the next 4-6 quarters
We have built in zero tenancy growth in FY19 considering the downward pressure
that could come from tenancy exits by Vodafone-Idea and smaller players. We
maintain our DCF-based target price to INR346, implying EV/tenancy of INR2.7m and
EV/tower of INR6.1m on FY20E. In our view, Indus Towers' acquisition could prove
beneficial due to (a) lower valuation (a 14% discount to Bharti Infratel) and (b)
improvement in capital structure and RoCE due to utilization of surplus cash for Idea
and Providence stake purchase. However, given the rich valuation of 9.4x
EV/EBITDA, which builds in 7% EBITDA cut in FY19 (with downward bias), and
growth headwinds for the next 4-6 quarters, we remain cautious. Maintain Neutral.
Exhibit 1: Comparison of EV/tower and EV/tenancy under different scenarios (FY18)
BHIN (consol.)
(inclu. +42% Indus)
Equity (INR b)
Net Debt (INR b)
Enterprise Value (INR b)
Financial and Operating Metrics
Revenue (INR b)
EBITDA (INR b)
EBITDA margin (%)
Towers (‘000)
Tenancies (‘000)
Tenancy Factor (x)
Valuation Metrics
EV/Towers (INR m)
EV/Tenancy (INR m)
EV/Sales (x)
EV/EBITDA (x)
6.1
2.7
3.9
8.8
5.2
2.3
3.5
8.4
5.7
2.5
3.6
8.5
5.7
2.5
3.7
8.5
5.7
2.5
3.7
8.5
Source: MOSL, Company
144.9
63.8
44%
91.5
205.6
2.25
187.4
77.2
41%
123.6
278.4
2.25
253.6
109.0
43%
163.2
367.1
2.25
253.6
109.0
43%
163.2
367.1
2.25
253.6
109.0
43%
163.2
367.1
2.25
604.8
(46.2)
558.6
609.0
39.0
648.0
Indus 100%
Bharti Infratel + 100% Indus
Scenario I*
870.1
55.6
925.7
Scenario II*
938.0
-9.4
928.6
Scenario III*
958.6
-29.0
929.6
*Scenario I - Idea Cellular sells entire stake in Indus and Providence sells 3.35% stake;
Scenario II - Idea Cellular does not sells stake in Indus but Providence sells 3.35% stake;
Scenario III - Neither Idea Cellular nor Providence sell stake in Indus
25 April 2018
2

Bharti Infratel
Exhibit 2: Valuation upside on Indus Tower lower valuation
Particulars
Tenancy (‘000)
Multiple (x)
Enterprise Value (INR b)
Net Debt (INR b)
Equity Value (INR b)
No of Shares (m)
Target Price (INR)
Upside from the merger (%)
Pre-merger
220.0
2.7
595.4
-44.6
639.9
1,850
346
Post-merger
393.1
2.7
1,063.8
55.6
1,008.2
2,661
379
10%
Source: MOSL, Company
Exhibit 3: Indus Valuation (INR b)
Particulars
Enterprise Value
Equity Value
Net debt
Deal Price: INR363
715.0
676.0
39.0
CMP: INR327
648.0
609.0
39.0
Source: MOSL, Company
Exhibit 4: Idea Cellular stake sale valued at 4% discount to market price
Particulars
Idea's stake in Indus
EV for Idea selling stake in Indus (INR b)
Indus equity value (if Idea sells stake)
Indus equity value (if Idea retains stake)
Discount at CMP
INR b
11.15%
65.0
583.0
609.0
-4%
Source: MOSL, Company
Exhibit 5: Potential upside for Bharti Airtel from Bharti Infratel-Indus merger (INR b)
Particulars
Stake in Infratel (pre-merger)
Stake in Infratel (post-merger)
Upside from merger
Stake (%) Value of Stake in Indus
53.5%
342.4
37.2%
375.0
10%
Source: MOSL, Company
Exhibit 6: Pre-merger Indus shareholding
Particulars
Bharti Infratel
Vodafone India
Idea Cellular
Providence
Total
Shareholding
42.00%
42.00%
11.15%
4.85%
100.00%
Source: MOSL, Company
25 April 2018
3

Bharti Infratel
Scenario I - Idea Cellular sells entire stake in Indus and Providence sells 3.35% stake
Exhibit 7: Post-merger Shareholding
Total
Pre-merger
No of shares (m)
% holding
New shares issued (m)
Post-merger
No of shares (m)
% holding
1,849.6
100.0%
811.1
2,660.7
100.0%
Bharti
989.8
53.5%
0.0
989.8
37.2%
Public
859.8
46.5%
0.0
859.8
32.3%
Vodafone
Idea
Providence
783.1
783.1
29.4%
0.0
0.0
0.0%
28.0
28.0
1.1%
Source: MOSL, Company
Exhibit 8: Post-Merger value
Particulars
Equity Value @INR326 (CMP)
Net Debt
Enterprise Value
INR b
870.1
55.6
925.7
Source: MOSL, Company
Exhibit 9: Post-merger net debt
Particulars
Bharti Infratel’s net cash
Indus Towers net debt
Idea’s 11.15% stake acquisition value
Providence’s 3.35% stake acquisition value
Total Idea and Providence stake acquisition value
Net Debt for Combined entity
INR b
-68.2
39.2
65.0
19.6
84.6
55.6
Source: MOSL, Company
Scenario II - Idea Cellular does not sells stake in Indus but Providence sells 3.35% stake
Exhibit 10: Post-merger Shareholding
Total
Pre-merger
No of shares (m)
% holding
New shares issued (m)
Post-merger
No of shares (m)
% holding
1,849.6
100.0%
1,019
2,868.6
100.0%
Bharti
989.8
53.5%
0.0
989.8
34.5%
Public
859.8
46.5%
0.0
859.8
30.0%
Vodafone
Idea
Providence
783.1
783.1
27.3%
207.9
207.9
7.2%
28.0
28.0
1.0%
Source: MOSL, Company
Exhibit 11: Post-Merger value
Particulars
Equity Value @INR326 (CMP)
Net Debt
Enterprise Value
INR b
938.0
-9.4
928.6
Source: MOSL, Company
Exhibit 12: Post-merger net debt
Particulars
Bharti Infratel’s net cash
Indus Towers net debt
Providence’s 3.35% stake acquisition value
Net Debt for Combined entity
INR b
-68.2
39.2
19.6
-9.4
Source: MOSL, Company
25 April 2018
4

Bharti Infratel
Scenario III - Neither Idea Cellular nor Providence sell stake in Indus
Exhibit 13: Post-merger Shareholding
Total
Pre-merger
No of shares (m)
% holding
New shares issued (m)
Post-merger
No of shares (m)
% holding
1,849.6
100.0%
1,082
2,932
100.0%
Bharti
989.8
53.5%
0.0
989.8
33.8%
Public
859.8
46.5%
0.0
859.8
29.3%
Vodafone
Idea
Providence
783.1
783.1
26.7%
207.9
207.9
7.1%
91.0
91.0
3.1%
Source: MOSL, Company
Exhibit 14: Post-Merger value
Particulars
Equity Value @INR326 (CMP)
Net Debt
Enterprise Value
INR b
958.6
-29.0
929.6
Source: MOSL, Company
Exhibit 15: Post-merger net debt
Particulars
Bharti Infratel’s net cash
Indus Towers net debt
Net Debt for Combined entity
INR b
-68.2
39.2
-29.0
Source: MOSL, Company
Exhibit 16: Bharti Infratel – SOTP Valuation
Value
(INR b)
Standalone (DCF based)
Indus (DCF based)
Indus value (42%)
Indus value post holding co discount of 20%
Total Enterprise value
Net Debt
Shares o/s (b)
Fair value
CMP
Upside
374
659
277
222
595
-45
2
640
Value
(INR/share)
202
356
120
322
-24
346
329
5%
Implied FY20
EV/Tower
(INR m)
4
2
2
6
Implied FY20
EV/EBITDA
(x)
12
9
7
10
7
10
Source: MOSL, Company
Exhibit 17: BHIN: 1-year forward EV/EBITDA band
20
15
10
5
0
EV/EBITDA (x)
Min (x)
Avg (x)
+1SD
Max (x)
-1SD
15.5
11.8
9.3
6.8
4.6
8.6
Source: MOSL, Company
25 April 2018
5

Bharti Infratel
Story in charts
Exhibit 18: Consol. revenue and EBITDA margin (INR b, %)
Consol Revenue (INR b)
Consol EBITDA margin (%)
Source: MOSL, Company
Exhibit 19: Rental revenue and EBITDA margin (INR b, %)
Rental Revenue (INR b)
Rental EBITDA margin (%)
Exhibit 20: Energy revenue and EBITDA margin (INR b, %)
Energy Revenue (INR b)
Energy EBITDA margin (%)
Source: MOSL, Company
Source: MOSL, Company
Exhibit 21: Change in tenancy demand trend
Towers (000's)
Average Sharing Factor
Co-locations (000's)
Exhibit 22: Sharing revenue per operator per month (INR)
Source: MOSL, Company
Source: MOSL, Company
25 April 2018
6

Bharti Infratel
Exhibit 23: Net addition in towers
Exhibit 24: Net addition in co-locations (‘000)
Source: MOSL, Company
Source: MOSL, Company
Exhibit 25: Tower portfolio break-up (000s)
Infratel Standalone
142
142
147
149
153
Indus (100%)
158
162
Total Towers
163
168
172
Exhibit 26: Co-locations break-up (000s)
Infratel Standalone
303
Indus (100%)
329
352
378
Total Co-locations
367
367
393
259
109
33
109
33
112
35
113
36
116
37
120
123
124
127
130
201
38
39
40
41
42
58
274
214
60
285
222
64
233
69
254
76
270
82
289
278
278
298
89
89
89
95
Source: MOSL, Company
Source: MOSL, Company
Exhibit 27: Average sharing factor (x)
Consolidated
2.50
2.30
2.10
1.90
1.70
1.50
1.7
1.8
1.9
2.0
2.0
2.1
2.2
Infratel Standalone
2.3
2.3
2.3
Indus
2.2
2.2
2.3
2.2
Exhibit 28: Sharing revenue per operator (INR 000s/month)
Infratel Standalone
Indus
38.1
37.2
37.0 36.9 37.0 37.1 36.9 37.0 37.0
36.8
34.7
34.5 34.7
33.7 33.7 33.9 34.1
32.7 32.9
35.9
35.0
35.4
Consolidated
1.8
1.8
1.9
2.0
2.1
2.2
34.3
30.6
31.5
31.5 31.7 32.1
33.7 34.1
Source: MOSL, Company
Source: MOSL, Company
25 April 2018
7

Bharti Infratel
Exhibit 29: Consolidated BHIN revenue growth (%)
22
21
18
9
Rental
Enery and other reimbursements
Aggregate
15
15
11
5
9
3
9
5
9
6
10
9
11
6
Exhibit 30: EBITDA margin (%)
Consolidated
50
40
Indus
Infratel Standalone
8
7
8
8
8
6
0
5
65
30
20
10
0
-4
Source: MOSL, Company
Source: MOSL, Company
Exhibit 31: Net capex intensity expected to moderate
Net Capex (INR b)
28.5
16.1 15.7
12.4
15.5 15.8
6.7
18
19
9
13.4 12.9 11.8
Net Capes/Sales (%)
Exhibit 32: Return ratios continue to improve (%)
RoE
RoCE
13.2 13.6 11.8 12.9
11.1
4.7
5.7
5.1
6.6
6.0
8.6
9.6
13.6 15.2
11.2
20.0 20.9
18.2 20.2
24
15
16
13
19
19
18
4.4
Source: MOSL, Company
Source: MOSL, Company
25 April 2018
8

Bharti Infratel
Exhibit 33: Bharti Infratel (Consol.) – A Snapshot
Towers (000s)
Consolidated
YoY (%)
Net additions
-Infratel Standalone
-Indus
Co-locations (000s)
Consolidated
YoY (%)
Net additions
-Infratel Standalone
-Indus
Average sharing factor (x)
Consolidated
-Infratel Standalone
-Indus
Sharing revenue per operator (INR '000/month)
Consolidated
YoY (%)
-Infratel Standalone
-Indus
Revenue break-up (INR b)
Rental revenue
YoY (%)
-Bharti Infratel standalone
-Indus
Energy and other reimbursements
YoY (%)
-Bharti Infratel standalone
-Indus
Total revenue (INR b)
YoY (%)
-Bharti Infratel standalone
-Indus
EBITDA (INR b)
YoY (%)
EBITDA margin (%)
EBITDA per tower (INR m)
FY13
82
3.8
3.0
2.0
2.5
157
4.5
6.7
3.4
7.8
1.9
1.8
2.0
33.7
0.1
37.0
31.5
63.8
5.3
27.4
82
38.9
14.8
17.2
49.6
103
8.7
45
132
38
7.5
37.0
0.5
FY14
83
1.6
1.3
0.8
1.2
167
6.8
10.6
5.6
12.0
2.0
1.9
2.0
33.9
0.6
37.1
31.7
65.8
3.0
29.6
86
42.5
9.3
20.4
52.3
108
5.4
50
139
44
15.6
40.6
0.5
FY15
86
3.0
2.5
1.3
2.9
182
9.0
15.1
6.7
20.0
2.1
2.0
2.1
34.1
0.5
36.9
32.1
71.3
8.3
32.1
94
45.4
6.9
21.8
55.8
117
7.8
54
150
50
13.7
42.9
0.6
FY16
89
3.4
2.9
1.3
3.9
195
7.0
12.7
5.8
16.5
2.2
2.1
2.2
34.5
1.2
37.0
32.7
77.9
9.4
35.0
103
45.2
-0.5
20.8
58.0
123
5.7
56
161
54
8.1
43.9
0.6
FY17
91
2.1
1.8
0.6
2.8
211
8.0
15.6
7.6
18.9
2.3
2.2
2.3
34.7
0.5
37.0
32.9
84.3
8.2
38.0
110
49.9
10.4
22.9
64.3
134
8.9
61
175
59
9.0
43.9
0.7
FY18
91
0.9
0.8
0.4
0.9
206
-2.4
-5.0
-0.6
-10.5
2.3
2.3
2.3
35.9
3.6
38.1
34.3
89.7
6.4
40.7
117
55.2
10.6
25.5
70.8
145
7.9
66
187
64
8.2
44.0
0.7
FY19E
94
3.0
2.7
1.5
3.0
206
0.0
0.0
0.0
0.0
2.2
2.2
2.2
35.0
-2.5
36.8
33.7
86.4
-3.7
39.1
113
58.7
6.3
27.0
75.4
145
0.1
66
188
59
-7.1
40.8
0.6
FY20E
97
2.9
2.7
1.5
3.0
220
7.0
14.4
6.0
20.0
2.2
2.2
2.3
35.4
1.2
37.2
34.1
90.5
4.8
41.0
118
62.3
6.2
28.5
80.5
153
5.3
69
198
62
4.0
40.3
0.6
Source: MOSL, Company
25 April 2018
9

Bharti Infratel
Financials and Valuations
Consolidated - Income Statement
Y/E March
Total Income from Operations
Change (%)
Power and fuel
Rent
Employee benefits expenses
Other Expenses
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
1,02,720
8.7
38,016
10,876
3,341
12,437
64,670
63.0
38,050
37.0
22,199
15,851
3,945
3,379
15,285
22
15,307
5,282
34.5
0
10,025
10,011
33.3
9.7
FY14
1,08,267
5.4
40,612
8,886
3,670
11,098
64,266
59.4
44,001
40.6
21,259
22,742
3,997
4,487
23,232
0
23,232
8,053
34.7
0
15,179
15,179
51.6
14.0
FY15
1,16,683
7.8
41,950
9,460
3,997
11,235
66,642
57.1
50,041
42.9
21,847
28,194
2,902
5,223
30,515
0
30,515
10,591
34.7
0
19,924
19,924
31.3
17.1
FY16
1,23,314
5.7
42,598
10,322
4,279
12,006
69,205
56.1
54,109
43.9
22,235
31,874
-1,847
2,048
35,769
0
35,769
13,293
37.2
0
22,476
22,476
12.8
18.2
FY17
1,34,237
8.9
46,533
11,628
4,679
12,428
75,268
56.1
58,969
43.9
22,626
36,343
-4,414
1,455
42,212
0
42,212
14,742
34.9
0
27,470
27,470
22.2
20.5
FY18
1,44,896
7.9
50,772
12,615
5,002
12,706
81,095
56.0
63,801
44.0
23,462
40,339
-97
2,326
42,762
-500
42,262
17,325
41.0
0
24,937
25,232
-8.1
17.4
FY19E
1,45,094
0.1
54,035
13,818
5,348
12,629
85,831
59.2
59,263
40.8
25,431
33,833
-4,536
0
38,368
0
38,368
13,045
34.0
0
25,323
25,323
0.4
17.5
(INR Million)
FY20E
1,52,815
5.3
57,073
14,949
5,728
13,414
91,163
59.7
61,652
40.3
26,193
35,459
-4,277
0
39,736
0
39,736
13,510
34.0
0
26,226
26,226
3.6
17.2
Consolidated - Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Total Loans
Deferred Tax Liabilities
Capital Employed
Net Fixed Assets
Capital WIP
Total Investments
Curr. Assets, Loans & Adv.
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Other Current Liabilities
Provisions
Net Current Assets
Appl. of Funds
E: MOSL Estimates
FY13
18,887
1,53,038
1,71,925
32,296
7,610
2,11,831
1,63,239
1,723
38,911
73,057
8,554
1,267
63,236
65,099
7,106
42,090
15,903
7,958
2,11,831
FY14
18,893
1,61,489
1,80,382
26,836
11,249
2,18,467
1,53,205
1,527
74,803
56,821
3,075
1,655
52,091
67,889
1,894
45,422
20,573
-11,068
2,18,467
FY15
18,938
1,51,262
1,70,200
17,131
12,247
1,99,578
1,48,121
2,260
58,822
62,344
3,532
9,120
49,692
71,969
1,342
43,694
26,933
-9,625
1,99,578
FY16
18,967
1,64,512
1,83,479
10,767
12,249
2,06,495
1,44,868
2,245
38,811
83,265
1,916
31,916
49,433
62,694
959
41,139
20,596
20,571
2,06,495
FY17
18,496
1,36,369
1,54,865
22,249
7,150
1,84,264
1,36,326
2,568
56,211
53,350
3,664
22,970
26,716
64,191
17,387
40,699
6,105
-10,841
1,84,264
FY18
18,496
1,51,048
1,69,544
22,402
6,223
1,98,169
1,30,740
4,066
67,850
37,207
9,185
759
27,263
41,694
18,580
16,448
6,666
-4,487
1,98,169
FY19E
18,496
1,44,187
1,62,683
22,402
6,223
1,91,308
1,23,964
4,066
67,850
35,616
9,189
-864
27,291
40,187
18,582
14,936
6,669
-4,571
1,91,308
(INR Million)
FY20E
18,496
1,38,229
1,56,725
22,402
6,223
1,85,350
1,15,840
4,066
67,850
40,069
9,414
2,368
28,287
42,474
19,165
16,569
6,740
-2,405
1,85,350
25 April 2018
10

Bharti Infratel
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 (%)
FCF per share
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Fixed Asset Turnover (x)
Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Creditor (Days)
Leverage Ratio (x)
Current Ratio
Interest Cover Ratio
Net Debt/Equity
FY13
5.3
17.1
91.0
3.0
65.6
FY14
8.0
19.3
95.5
4.4
63.5
FY15
10.5
22.1
89.9
11.0
121.0
31.5
15.0
3.7
5.0
11.5
3.3
11.5
11.4
11.1
13.6
0.8
0.6
0
11
4
0.9
9.7
-0.3
FY16
11.8
23.6
96.7
3.0
29.2
28.0
14.1
3.4
4.6
10.5
0.9
12.9
12.7
11.2
15.2
0.9
0.6
0
6
3
1.3
-17.3
-0.3
FY17
14.9
27.1
83.7
16.0
125.0
22.3
12.2
4.0
4.1
9.4
4.8
10.6
16.2
13.2
20.0
1.0
0.7
0
10
47
0.8
-8.2
-0.4
FY18
13.6
26.3
91.7
0.0
0.0
24.3
12.6
3.6
3.9
8.9
0.0
-7.1
15.6
13.6
20.9
1.1
0.7
0
23
47
0.9
-415.9
-0.3
FY19E
13.7
27.4
88.0
15.0
127.1
24.2
12.1
3.8
3.9
9.6
4.5
13.0
15.2
11.8
18.2
1.2
0.8
0
23
47
0.9
-7.5
-0.3
FY20E
14.2
28.3
84.7
14.6
122.7
23.4
11.7
3.9
3.8
9.4
4.4
15.3
16.4
12.9
20.2
1.3
0.8
0
22
46
0.9
-8.3
-0.3
0.9
10.7
6.3
6.6
6.0
0.6
0.5
0
30
25
1.1
4.0
0.0
1.3
13.8
8.6
8.6
9.6
0.7
0.5
0
10
6
0.8
5.7
-0.3
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: MOSL Estimates
FY13
15,307
22,199
3,717
-3,722
3,463
40,964
-4,452
36,512
-16,173
20,339
-34,795
-6,976
-57,944
31,543
124
-3,715
-5,721
0
22231
799
468
1,267
FY14
23,232
21,259
3,864
-4,345
1,160
45,170
-5,646
39,524
-13,389
26,135
-35,977
25,904
-23,462
57
-4,254
-3,805
-7,003
0
-15005
1,057
598
3,009
FY15
30,515
21,847
2,946
-8,420
-1,655
45,233
-5,338
39,895
-18,144
21,751
17,588
17
-539
490
-7,601
-3,010
-21,755
0
-31876
7,480
1,640
7,982
FY16
36,207
22,693
2,181
-11,547
630
50,164
-6,218
43,946
-19,433
24,513
25,887
7,504
13,958
338
-8,755
-2,180
-15,676
0
-26273
31,631
285
31,916
FY17
35,797
11,657
365
-7,961
-1,017
38,841
-10,179
28,662
-9,060
19,602
8,913
970
823
-19,969
0
0
-6,679
0
-26,648
2,837
20,133
22,970
FY18
42,262
23,462
-97
-17,325
-28,565
19,737
-13,511
6,226
-19,374
-13,148
-11,639
5,680
-25,333
0
154
0
0
0
154
-18,954
19,713
759
FY19E
38,368
25,431
-4,536
-13,045
-1,539
44,680
-2,048
42,632
-18,654
23,977
0
5,305
-13,349
0
0
4,536
-32,184
0
-27,648
1,634
-2,498
-864
(INR Million)
FY20E
39,736
26,193
-4,277
-13,510
1,066
49,208
-2,048
47,160
-18,069
29,091
0
5,305
-12,764
0
0
4,277
-32,184
0
-27,907
6,489
-4,121
2,368
25 April 2018
11

Explanation of Investment Rating
Investment Rating
BUY
SELL
NEUTRAL
UNDER REVIEW
NOT RATED
Expected return (over 12-month)
>=15%
< - 10%
> - 10 % to 15%
Rating may undergo a change
We have forward looking estimates for the stock but we refrain from assigning recommendation
Bharti Infratel
*In case the recommendation given by the Research Analyst becomes inconsistent with the investment rating legend, the Research Analyst shall within 28 days of the inconsistency, take appropriate measures to make the recommendation consistent with the investment rating legend.
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a)
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b)
received compensation for investment banking or merchant banking or brokerage services from subject company of this research report,
c)
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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 of MOSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report
is not recommendatory in nature. 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,
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virtue of their receiving this report.
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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.
Disclosure of Interest Statement
Analyst ownership of the stock
Bharti Infratel
No
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.
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Registration details of group entities.: 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:
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25 April 2018
12