Buy Bharti Airtel - Motilal Oswal

Bharti Airtel (BHARTI IN; Mkt Cap USD30.5b, CMP Rs359, Buy)

Operating environment in India continues to improve; Africa business to be self-sustaining; maintain Buy

Initial signs of elasticity in the Africa market are encouraging with significant room for MOU expansion.

Margin improvement in Africa business is likely only in FY12 due to expenses being incurred on integration and restructuring.

Bharti management remains confident that Africa business would be self-sustaining on cash flow basis.

Recent discussions with the communications ministry have been constructive and Bharti expects to be a net beneficiary of the ongoing regulatory revamp.

Operating environment in the India business continues to improve with lower pressure on tariffs and strong traffic growth trends.

The management believes that 3G presents a significant opportunity and has a viable business case despite the high spectrum pay-outs.

Source : Equity Bulls

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