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	113
Hitesh Ramji Javeri	59
Globe Capital Market Ltd	51
Dipak Kanayalal Shah	38
Mahendra Girdharilal	38

Name	Companies Held
reliance-capital-trustee-co-ltd	157
Hdfc Trustee Company Limited	156
Bank Of India	131
BIRLA-SUN-LIFE-TRUSTEE-COMPANY-PRIVATE-LIMITED	127
general-insurance-corporation-of-india	82

Name	Returns(%)
Name	Week	Month	Year
Sundaram Equity Plus - Reg - G	0.55%	0.25%	4.68%
JPMorgan India Equity Income Fund - Reg - G	-0.15%	-0.22%	2.83%
Canara Robeco Large Cap+ Fund - Reg - G	0.21%	0.60%	2.71%
SBI MAGNUM EQUITY FUND - Reg - G	0.54%	0.85%	2.63%
UTI - Equity Fund - Reg - G	0.74%	0.16%	2.32%

Name	Returns(%)
Name	Week	Month	Year
Axis Midcap Fund - Reg - G	0.32%	-0.09%	1.87%
ICICI Prudential Business Cycle Fund - Series 2 - Reg - G	-0.49%	0.71%	1.35%
Birla Sun Life MNC Fund - Reg - G	-0.03%	-0.28%	-4.77%
Birla Sun Life Top 100 - Reg - G	-0.18%	0.92%	-5.23%
SBI EMERGING BUSINESSES FUND - GROWTH - Reg - G	0.14%	0.48%	-5.29%

Name	Returns(%)
Name	Week	Month	Year
Kotak Income Opportunities Fund - Reg - G	0.15%	0.96%	6.60%
Axis Equity Fund - Reg - G	0.00%	-0.48%	5.59%
Reliance Dynamic Bond Fund(Formerly Reliance NRI Income Fund) - Reg - G	0.25%	0.59%	4.97%
Quantum Dynamic Bond Fund - Reg - G	0.22%	0.68%	4.93%
Axis Equity Saver Fund - Reg - G	0.32%	0.08%	4.91%

Bharti Infratel Ltd.

Indus merger to accentuate earnings pressure

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