The Hindu Business Line : Bharti Tele in tune with market perception

Brokers said that while telecom sector stocks have been witnessing bullish sentiment, talk of a hyper growth phase, coupled with the company's weightage in the index, has been sustaining interest in the BTVL counter.

According to Mr R. Amarnath, Head of Research, ICICI Securities, superior management credentials bringing in world-class practices has positioned Bharti to capitalise strongly on this opportunity.

"Better-than-expected subscriber numbers, improved margins and the fact that it has confidently seen off the most intense phase of competitive pressures, places Bharti favourably in the context of the superior growth outlook. Going forward, the timing of footprint expansion in six more circles coincides with the company moving into free cash flow generation and augurs well for accelerated earnings growth. Bharti's mobile and wireline subscribers are expected to grow at a 57 per cent, CAGR over fiscal '04-'06E (estimates) to 15.7 million and 1.6 million, respectively," says an ISEC report.

BTVL is a leader in the GSM cellular market, with 25 per cent share as on December 31, 2003. While mobile services constitute the largest portion of its business, it also provides fixed line services and Internet access. The company's cellular subscriber base currently rests around 6 million.

According to analyst Mr Jaspreet Singh of Prabhudas Liladher, with critical mass being achieved, the company is all set to reap the benefits. "Of the growth coming in, 50 per cent of it will go to the bottomline," he said.

Mr Singh is of the view that over the next two years, BSNL, Bharti and Reliance will see a total subscriber base of 10 crore put together.

Not only is the scrip buoyant over the company's future prospects, the market is also optimistic that post-elections, the government could hike FDI/FII cap for telecom companies to 74 per cent. This is also one reason for the FII interest in the stock being on an upswing.

The stock closed at around Rs 154.65, up 1.18 per cent, with around 7 lakh shares traded on the BSE. On the NSE, it ended at Rs 155.80, up 2.03 per cent, with around 27 lakh shares traded.

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