Motilal Oswal has come out with a detailed report on Bharti Airtel?s financial results.
The report analysis and gives an overview of the performance by the operator for the quarter ended June 30, 2012. According to the report, the operator has witnessed significant divergence in growth within its African portfolio. And going forward, the company will be focusing on data opportunities in the Indian market.
The key highlights of the report include,
While Bharti Airtel?s Africa business proforma revenue growth at aggregate level remained strong at 25 per cent in rupee terms in financial year 2012, there was significant divergence in the performance at the individual country-level. As per our proforma estimates, Bharti Africa witnessed 35 per cent revenue growth in Sierra Leone, Ghana, Uganda, and DRC (these countries together contribute 18 per cent of Africa revenue). However, proforma revenue growth is estimated to be single-digit/negative for Chad, Niger, Seychelles, Madagascar, Kenya, Malawi and Congo B (these countries together constitute 21 per cent of Africa revenue).
Gross debt for the company remains largely dollar denominated (70 per cent) followed by Rs (19 per cent) and other currencies (11 per cent). Debt schedule indicates relatively high re-payment in financial year 2013 with 28 per cent of overall gross debt (Rs 193 billion) having a maturity period of less than one year. However leverage remains relatively comfortable with financial year 2012 net debt/EBITDA at 2.75x.
Only 9 per cent of the overall borrowings for Bharti Airtel are at a fixed rate implying that interest rates remain key earnings variable.
The operator?s earnings sensitivity to exchange rate remains high as well with adverse impact of Rs 4.6 billion on financial year 2012 PBT (7 per cent) for a 5 per cent appreciation in dollars, assuming all other variables remained constant.
Contingent liabilities for the operator have increased significantly during financial year 2012 largely due to increased tax-related disputes. Contingencies increased 81 per cent year-on-year to Rs 55.5 billion in financial year 2012.
A 14 per cent EBITDA compound annual growth rate for Bharti Airtel is expected over financial year 2012-14. The stock trades at EV/EBITDA of 6.5x financial year 2013 and 5.3x financial year 2014.
To download the complete report, click here,
