-------- Forwarded Message --------
Subject: Bharti Airtel: 315 May Be A Strong Demand Zone Despite
"Project Leap"
Date: Wed, 2 Dec 2015 09:07:03 +0530
From: Asis Ghosh <asis...@gmail.com>
Reply-To: asis...@gmail.com
*For Bharti, 345-375 may be the near term target *
*Despite Rs.600 bln capex over the next three years, *
*credit rating of Bharti is unaffected-S&P*
*CMP: 323*
*
*
*Buy on dips around: 315*
*
*
*TGT: 345-375-388-400 (1-6M)*
*
*
*TGT: 452-485 & 605 (12-24M)*
*
*
*TSL<305-300*
Note:Looking at the chart, consecutive closing below 300 in Bharti for
any reason, the stock may further fall up to 280*-260 area where it may
be again accumulated for better investment buying average as 280 is a
major technical support area for the stock.
To combat growing threat from R-JIO and to improve overall network
congestion ( "call drop" issues etc), Bharti has unveiled massive capex
plan of Rs.60000 cr for next three years. Although this capex will be
funded mainly through internal accruals, there may be adverse effect in
its projected cash flow and managing the spectrum leverage in future. It
may also further stretch its Balance Sheet, where debt level is still
significantly high despite ongoing effort of de-leverage/tower asset
sales in SA. Analysts are also concerned over its ROE in the near term
due to tepid telecom ARPU in India.
But, S&P believes that despite this capex of Rs.600 bln, the FFO (Funds
From Operation) to debt ratio may be around 25% in FY-18 compared with
earlier expectation of 30%. Its presently stands around 21% for FY-15
with below 20% being the trigger line.
As par S&P, Bharti's planned Rs.600 bln investments over next three
years includes Rs.150-170 bln for annual capital expenditure; Rs.30-40
bln annually for spectrum payments from FY-17 and about Rs.60 bln for
possible additional spectrum acquisition over the next two years
(discretionary or optional). Thus, in that new spectrum scenario, there
may be additional Rs.150 bln cash outflow compared with the earlier
projections (Rs.420-450 bln already guided) and the FFO/Debt ratio will
be around 25%.
The stock has already corrected by around 15% from its recent top and
now 315-300 is a strong technical support area for a good buying
opportunist with better risk/reward ratio.
It may be the only listed telecom company in India, which can afford to
compete with the likely aggression of R-JIO.
To be cont for some more news & analytical inputs----
Analytical Charts:
<http://1.bp.blogspot.com/-oiKXZLzNEGM/Vl5iyK2ozcI/AAAAAAAAFFY/R8nFi3nYGhc/s1600/Bharti-01-12-2015.png>
<http://3.bp.blogspot.com/-UrleE1lvHLA/Vl5i2aCdOrI/AAAAAAAAFFg/IZbMdYFbVgQ/s1600/Bharti-FIBB-01-12-2015.png>
<http://4.bp.blogspot.com/-9aupJgQAmq0/Vl5i5ZPHcUI/AAAAAAAAFFo/MPbMnX2CCII/s1600/Bharti-WK-01-12-2015.png>
<http://3.bp.blogspot.com/-a1Gh-QARuB0/Vl5jHk8xetI/AAAAAAAAFFw/aKNGF0yHvD4/s1600/Bharti-Pattern-01-12-2015.png>
<http://4.bp.blogspot.com/-7GJ_9i1KrWc/Vl5jK2rx6xI/AAAAAAAAFF4/zmkXGnmjxQ4/s1600/Bharti-TL-01-12-2015.png>
<http://2.bp.blogspot.com/-JZRtAZmsmyU/Vl5jNqi8vYI/AAAAAAAAFGA/wbZgpTur7Nk/s1600/Bharti-TL-RSI-01-12-2015.png>
--
Thanks & Regards,
Asis Ghosh
(asisghosh.blogspot.com)
NCFM-TA Certified
--
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