Bharti Infratel Q4 results today, experts expect PAT to grow

Telecom tower infrastructure company, Bharti Infratel is set to announce its financial result for the quarter ended on March 31. 

In the previous quarter the company had reported 25% increase in consolidated net profit to Rs 620 crore. It had posted net profit of Rs 495 crore in the same period of last fiscal, 2015-16.

The consolidated revenue of mobile tower arm of Bharti Airtel had increased by 10% to Rs 3,400 crore during the October-December quarter of 2016-17, as against Rs 3,105.5 crore posted in the same period of 2015-16.

Bharti Infratel Chairman, Akhil Gupta, had said, "Post large investments in spectrum, operators are focused on strengthening their network capacities and coverage, resulting in highest ever addition of co-locations in this quarter."

Experts outlook

According to a Motilal Oswal report, the company's consolidated revenue is expected to grow by 10.1% on year-on-year basis and 3% on quarter-on-quarter basis to Rs 35 billion. 

The consolidated rental revenue is estimated to be Rs 21.8 billion, up 2.8% q-o-q and 7.1% on y-o-y basis. The analysts expect energy and other reimbursements to grow 3.4% QoQ.

"We expect consolidated EBITDA to improve 3% QoQ to Rs 15.2 billion. EBITDA margin is likely to remain flat at 43.5% despite the healthy tenancy addition owing to pressure on rental rates from revised agreements. We expect PAT to grow 16.5% QoQ to Rs 7.2 billion," the report said.

Moreover, Edelweiss, in its report mentioned that the company is estimated to benefit from aggressive data roll out by telecom operators with addition of 5,910 tenancies. It expect the company to report 2.5% QoQ revenue growth led by the 2.9% QoQ growth in rental revenue and 1.8% QoQ spurt in energy revenue.

"We expect Infratel to add 492 towers and 5,910 tenancies during the quarter. EBITDA margin is expected to increase 90 bps QoQ to 44.4% on strong tenancy growth. PAT is expected to grow 9.5% YoY to Rs 7.87 billion," the report said.

Commentary on consolidation in telecom industry, standalone 3G/4G data sites rollout, status of expansion in related business areas and opportunities emerging in acquiring towers from Vodafone, Idea or stake in Indus will be key factors to watch.

Company's stock performance

If we look at the company's stock performance in FY17, clearly, it has dropped. The share price of the company on April 1, 2016 was trading at Rs 385.6 per piece. While, the share price as on March 31, 2017 was Rs 325.9 per piece, giving negative returns of 15.4% to investors. 

Maintaining "BUY", Motilal Oswal report said, "Bharti Infratel trades at an attractive EV/EBITDA of 9.6x FY17E and 8.2x FY18E."