Emkay Global Financial Services has a 'hold' call on Bharti Airtel with a target price of Rs 356.The current market price of Bharti Airtel is Rs 390.25.Time period given by the brokerage is one year when Bharti Airtel price can reach the defined target.Outlook by Emkay Global:Abatement in the pace of India Wireless revenue erosion is providing some relief, but revenue recovery is still not visible.
We continue to highlight that Airtel is taking the right steps: 1) aggressive expansion of network capacity with accelerated capex, 2) retention of revenue Subscriber market share, 3) countering of JIO aggressive offerings on pricing as well as products, 4) building of robust content library and 5) War on Waste initiative.
But, competitive headwinds have been overshadowing these underlying efforts on cost savings.
We are estimating partial revenue recovery in FY20E, leading to healthy operating leverage.
In current scenario, estimates are expected to remain very volatile and subject to change every quarter.
In the long term, Airtel is relatively better placed to thwart competition.
But, it would be a painful process amid a leveraged balance sheet and continuous fall in India EBITDA.
4G network quality and content offerings are the crucial factors going ahead for retaining quality subscribers.
Africa business remains steady with improvement in both revenue as well as EBITDA.
The same is expected to remain steady going forward as well.