BHARTI AIRTEL Stock Analysis - Quarterly Result Update

Stock analysis based on Bharti Airtel's December '09 quarter results by Centrum Broking, a stock trading broker. Analysis suggest good upside in an years time.

Reco buy price: Rs 321
CMP: Rs 306.50
Target price: Rs 400
Upside: 30.5%

Bharti’s December 2009 quarter performance remained flat due to sequential fall in RPM (revenues per minute) by 7.8 per cent to 52 paisa. However, mobile minutes registered growth of 6.7 per cent to Rs 15,300 crore on the back of elasticity from lower tariffs and lower base in September 2009 quarter. Revenue declined 0.7 per cent sequentially and grew 1.4 per cent year-on-year to Rs 9,770 crore.

Increase in network costs and selling, general and administration costs depressed margins. EBITDA fell 6 per cent sequentially to Rs 3,900 crore and margins contracted 204 basis points to 40 per cent. The brokerage expects revenue performance to remain subdued in the March 2010 quarter, as RPM has not yet bottomed despite competition.

Market Cap 116,604.40
* EPS (TTM) 24.68
* P/E 12.44
* P/C 9.27
* Book Value 72.49
* Price/Book 4.24
Div(%) 20.00
Div Yield(%) 0.33
Market Lot 1.00
Face Value 5.00
Industry P/E 13.21

At Rs 321, the stock trades at 12.1 times its estimated 2010-11 EPS.