Item: Bharti Infratel Ltd.
Rating: 3
Author: Motilal Oswal

Indus merger to accentuate earnings pressure

Neutral: Bharti Infratel Ltd.

Target

Motilal Oswal

Management indicated that site cancellations have largely been concluded and the huge data growth is likely to drive the need for high network investment. This would be seen in macro site requirements, as telcos will need to make the network dense, besides building other layers of the network like fiber sharing, small cells, IBS, WiFi hotspot and other managed services. But Bharti Infratel does not plan to build ahead of telcos requirements. Further, we understand that Bharti Infratels dominant position in the tower market is weakening as the future of its large clientele is uncertain, while the new entrant is going solo towards network deployment. Newer technologies like IBS, small cell are being done independently by operators, while Bharti Infratel is slow in the roll-out. Our current estimates build revenue/EBITDA/PAT decline of 0%/11%/10% in FY19, and a similar trend should follow in FY20.

Comment

Name	Companies Held
Subramanian P	107
Hitesh Ramji Javeri	54
Globe Capital Market Ltd	50
Mahendra Girdharilal	49
Dipak Kanayalal Shah	40

Name	Companies Held
reliance-capital-trustee-co-ltd	151
Hdfc Trustee Company Limited	144
BIRLA-SUN-LIFE-TRUSTEE-COMPANY-PRIVATE-LIMITED	120
Bank Of India	119
general-insurance-corporation-of-india	72

Name	Returns(%)
Name	Week	Month	Year
Edelweiss Equity Savings Fund - Reg - G	0.22%	0.07%	1.46%
BNP PARIBAS LARGE CAP FUND - Reg - G	-0.29%	-0.74%	0.13%
Edelweiss Prudent Advantage Fund - Reg - G	0.00%	0.00%	0.00%
Union KBC Trigger Fund - Series 1 - Reg - G	0.00%	0.00%	0.00%
HDFC Balance Advantage Fund - Reg - G	-1.44%	-6.04%	-2.42%

Name	Returns(%)
Name	Week	Month	Year
Axis Small Cap Fund - Reg - G	1.50%	0.57%	2.01%
MIRAE ASSET EMERGING BLUECHIP FUND - Reg - G	-0.88%	-2.65%	-2.61%
SBI FOCUSED EQUITY FUND - Reg - G	-0.65%	-4.64%	-3.81%
Essel Large & Midcap Fund - Reg - G	-0.07%	-2.82%	-5.37%
Axis Midcap Fund - Reg - G	-0.26%	-0.06%	-6.19%

Name	Returns(%)
Name	Week	Month	Year
Reliance Dynamic Bond Fund - Reg - G	0.43%	0.27%	11.57%
Kotak Credit Risk Fund - Reg - G	0.38%	0.91%	7.95%
ICICI Prudential Equity Savings Fund - Reg - G	-0.14%	-0.86%	5.80%
Kotak Equity Savings Fund - Reg - G	-0.21%	-0.28%	2.02%
Axis Equity Saver Fund - Reg - G	-0.39%	0.08%	1.26%

Bharti Infratel Ltd.

Indus merger to accentuate earnings pressure

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