Indus Towers Ltd. share price target

Bharti Infratel, as one of the pioneers of Shared Tower Telecom Infrastructure services, Infratel has helped Telecom operators maximize their reach in a short period of time by providing them compelling capex saving opportunities, as a result, making them focus their investment in reaching out to more and more communities across the country, and contributing in offering highly affordable telecom services which helps...

Bharti Infratel continued to report a muted operating performance. Revenues (on a proportionate consolidation basis) came in at | 3673 crore, up 1% QoQ. Core rental revenues were at | 2283 crore, up 2% QoQ, driven by extended occupation of exiting tenants (~2798 collocations where actual exits yet to happen despite exit notice). Furthermore, it should be noted that underlying Q3FY20 revenue growth was weak and reported numbers are higher on account of exit penalty (| 105.3 crore) and Ind-AS 116 adoption (rent equalisation of | 70.5 crore). The company reported net increase of 744...

Bharti Infratel continued to report a muted performance on the topline front given the weak gross tenancy addition. Revenues (on a proportionate consolidation basis) came in at | 3637.6 crore, down 2% QoQ with core rental revenues of | 2328.5 crore, down 1% QoQ. It should be noted that underlying Q2FY20 revenue growth was weak, albeit exit penalty (| 101 crore), Ind-AS 116 adoption (rent equalisation of | 76.7 crore) and extended occupation of exiting tenants (~3750 collocations where actual exits are yet to happen despite exit notice) led to a better-than-expected show on a...

22 October 2019 quarter performance was below our expectations. On a pre-Ind-AS 116 basis, pro forma consol. revenue/EBITDA declined by 1.9%/1.4% QoQ to INR35.6b/INR14.8b (3%/3.5% miss). Rental and energy revenue dropped 4.4% and 3.6% QoQ to INR21.6b and INR14b, respectively. Further, rental EBITDA declined 1.4% QoQ to INR14.8b, with the margin contracting 40bp QoQ to 67.

During the quarter, the company reported net increase of 523 co-locations on consolidated basis vs. our expectation of net loss of 1,750 tenancies. We, however, note that positive net addition is largely owing to delay in exits rather than any improved traction of network addition by incumbents. We note that Vodafone Idea had guided for further ~21000 exits, the timing of which should be over the next couple of quarters. Moreover, we build in tepid gross tenancy addition ahead, given the measured approach of incumbents in expansion. Hence, we build in 181877 net co-locations in...

Healthy tenancy rates; uncertainty looms over growth Strong 6% rental EBITDA Jump: Bharti Infratel reported healthy 1QFY20 results, beating our estimates. On pre IND-AS 116 basis, Proforma consol. revenue/EBITDA grew 1% QoQ to INR36.3b/INR15b (4% beat). A key surprise was the rental revenue growth of 4% QoQ to INR21.8b, driven by 6% jump in the...

Due to continued hyper competition in the sector along with risk from jio, uncertainty over sustainability of its key customer base & lack of clarity on postmerger entity, we have a neutral stance on BHIN. Bharti Infratel Ltd (BHIN) is one of the leading telecom tower infrastructure player with 92,277 towers across 22 telecommunication circles in India. Backed by parent Bharti and by virtue of 42% stake in Indus Towers, BHIN shares a strong...

Bharti Infratel is India's leading provider of tower and related infrastructure and it deploys, The three leading wireless telecommunications service providers in India by revenue - Bharti Airtel, Vodafone and Idea Cellular are the largest customers of Bharti Infratel. The company has...

Merger of Indus and consequent savings in DDT (~Rs 5bn) and healthy dividend yield (~5%) are key positives. Tenancy growth is key re-rating trigger. Tariff increase by telcos may accelerate future rollout and act as catalyst for higher than expected tenancy increase. That said, tenancy reduction (~20-25k) by VIL as per their guidance is key risk. Tower offerings by Jio/ATC for co-location are additional risk. We presume ATC has sizeable tower portfolio but limited tenants as it anchor customer (Tata Tele) has shut business. Pricing renegotiations by telcos remains key long-term risk. We foresee this playing out gradually post the stake sale by promoters and mostly from FY22 as large portfolio comes up for renewal. Bharti Infratels (BHIN) 4QFY19 results were in-line but weak operationally. This was on account of tenancy decline of 1% QoQ. We downgrade BHIN to Neutral with TP of Rs 273 @ 20x FY21E EPS (vs. Rs 354 earlier @ 25x). Our multiple downgrade is driven by risk of incremental tenancy loss from VIL and long term risk of rental renegotiations by customers.