Bharti Airtel - Cashflow, Deleveraging And Emerging Opportunities: ICICI Securities
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ICICI Securities Report
This note is aimed at reviewing top down industry opportunities and implications for each operator. Though industry consumer spend has reached pre-Reliance Jio run-rate, average revenue per user is still 15% lower. It is without factoring subscriber identification module consolidation, inflation and multi-fold rise in data usage which implies large upside to industry ARPU, and hence, the revenue.
RJio’s adjusted gross revenue market share may peak in FY23; Bharti Airtel Ltd. should progressively narrow gap versus RJio in future. Bharti Airtel's Ebitda is expected to grow stronger, and generate free cash flow to equity of more than 200 billion FY24 onwards which should help reduce net debt significantly.
Further, Airtel’s emerging opportunities are under-appreciated - fibre-to-the-home, enterprise (including data center), payments bank and digital services.
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