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ICICI Securities: Bharti Airtel - It’s Darkest Before Dawn 

ICICI Securities: Bharti Airtel - It’s Darkest Before Dawn

The Bharti Airtel Ltd. logo sits on company’s retail store in Mumbai, India. (Dhiraj Singh/Bloomberg)
The Bharti Airtel Ltd. logo sits on company’s retail store in Mumbai, India. (Dhiraj Singh/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

We see the negativity on Bharti Airtel Ltd.’s stock price overdone as our thesis on the company remains unchanged with respect to Ebitda / free cash flow growth driven by large tariff hikes (else Vodafone Idea Ltd. may not remain a going concern).

Bharti Airtel’s sound ability to execute in the market, and its incremental adjusted gross revenue (AGR) (including national long distance) is narrowing the gap with market leader.

The announcement on new postpaid tariff and low-end smartphone launch is unlikely to derail Bharti Airtel’s Ebitda / free cash flow growth in our view.

Further, the upcoming spectrum auctions are getting delayed due to various issues and have not received Union Cabinet approval as yet.

Positive catalyst could be in clarity on floor price which, if in favour of operators, could lead to significant rerating of Bharti Airtel.

Operators are yet to file for review or curative petition on the AGR case and any positive outcome can reduce the AGR burden.

Click on the attachment to read the full report:

ICICI Securities Bharti Airtel Company Update.pdf

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