Comments
Telecom industry revenues will decline by 9 per cent to $21.6 billion in FY19 as incumbents continue to calibrate offers to match the plans of Reliance Industries Ltd's telecom unit, Jio, according to Deutsche Bank.
DB says it expects the to-be-merged entity of Idea Cellular Ltd and Vodafone Group's India unit to have 37 per cent revenue share in FY20, Bharti Airtel Ltd 36 per cent and Reliance Jio 25 per cent.
It has cut the price target for Bharti Airtel to Rs 475 from Rs 595 and to Rs 105 from Rs 130 for Idea Cellular.
Deutsche Bank says Bharti Airtel and Idea will trade at FY20E EV/EBITDA of 6.0x and 7.4x, below their long-term levels leaving room for valuation catch-up on earnings recovery.
The brokerage forecasts Bharti Airtel's consolidated revenue to achieve a three-year CAGR of 9.7 per cent, driven by 11.9 per cent and 3 per cent growth in India and Africa businesses, respectively.
It says Bharti Airtel's expected growth in India is largely driven by the exit of most weak players from Jio's entry and that Bharti has been at the forefront of buying these assets at distressed valuations.
Bharti Airtel's robust spectrum portfolio and growth in 4G data will continue to aid its cost leadership in India. DB says the market continues to underestimate the to-be-merged merged entity's market position.
Bharti Airtel shares rose as much as 1.6 per cent, while Idea shares recovered from early falls to trade 1 per cent higher.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.