Stock Idea Bharti Airtel Ltd.

Vol. 6 / 11-12

June 18, 2011

Buy

CMP: 380.35 Upside: 18.3 %

Target: 450.0 Horizon: 12 M

BHARTI AIRTEL LTD.

Analyst: Phone: Email: Head of Research: E-mail: Atul Kanwar +91 11 66272300 Ext: 651 atulkanwar@bajajcapital.com Alok Agarwala aloka@bajajcapital.com

About the Company

Bharti Airtel is the largest wireless service provider in our country and the 5th largest integrated telecom operator in the world. It has presence in all the 22 telecom circles in India and operations in Srilanka, Bangladesh and Africa. The company provides its wireless services under the GSM (Global System for Mobile Communication) technology. It also offers broadband, IPTV (Internet Protocol Television) & Digital TV services. The company had an aggregate of 220.9 million subscribers as of March 31, 2011 including 211.9 million mobile services customers. Bharti Airtel gives an integrated suite of telecom solutions to its enterprise customers, in addition to providing long distance connectivity both nationally and internationally. All these services are rendered under a unified brand Airtel. The company also deploys, owns and manages passive infrastructure pertaining to telecom operations under its subsidiary Bharti Infratel Ltd that also owns 42% of Indus Towers Ltd.

Key Data Sector Face value (Rs.) 52-week high/low (Rs.) Market cap (Rs. cr.) Book value (Rs.) Price / book value PE ratio (TTM) Market cap / sales Dividend (%) Average daily volume (1 Y) Beta 1 year return (%) Shareholding Pattern
Promoter FII 5.8% 8.7% 17.2% 68.3% DII

Telecom Services 5.0 400.1 / 259.5 144439.1 124.8 3.0 24.5 2.4 20 5579290 0.8 42.4

Investment Rationale India is the worlds fastest growing mobile telecom services market India is the fastest growing wireless market in the world and has the second largest mobile services connections after China. In India, the customer base of the mobile telecom service providers increased by 20.2 million in March 2011, taking the total number of mobile subscriptions to more than 811.6 million. This includes 66.3% urban and 33.7% rural subscribers. The total telecom customer base has increased to 846.3 million and the overall tele-density in the country has reached 70.9. The industry is expected to reach a size of Rs 344,921 cr by 2012 at a growth rate of over 26%. India is expected to have 1.16 billion mobile subscribers by 2013 and it is expected to overtake China. 3G services to be a growth driver Bharti Airtel had bagged 3G spectrum in 13 out of the 22 telecom circles through an auction held last year, for Rs 12,295 cr. These 13 circles have 65-70% of the companys 2G subscriber base. The company has already launched 3G services in many cities. The initial response has been overwhelming and Airtel is the market leader with 3 million 3G customers out of the total 9 million users of this service. The company plans to offer services like video call, live streaming of video, high speed internet, mobile TV etc.in the beginning. This service, a premium offering is expected to stabilize the companys ARPU (Average Revenue Per User) though the voice telephony and SMS are being provided by the company at prices that are at par with 2G. The nonvoice revenue contributes ~12% to the total revenues in India, compared to 25-30% in developed markets and it is expected to grow in the years going forward. For Bharti Airtel, the share of value added revenues in the total revenues increased to 15.0% in Q4FY11 compared to 13.8% in Q3FY11. 3G services would further increase the Value Added Services (VAS) share in mobility revenue. The company plans to generate one fourth of its sales from non voice revenues over the next two or three years. This shift to non-voice and also non-SMS revenues is already visible as SMS services that used to contribute 3/4th to the non voice revenue a year back, just contributes 1/4th now. 1 Bajaj Capital Centre for Investment Research

Others

Source: BSE. As on Mar 31, 2010 Stock Performance

150 140 130 120 110 100 90 80

Bharti Airtel

NSE

Stock Idea Bharti Airtel Ltd.

In Q4FY11, Telemedia services subscribers have grown to 3.3 million and those of Digital TV services to 5.7 million, a growth of 1% and 15% QoQ respectively. Airtels subscriber base in Bangladesh and Srilanka grew ~10% QoQ to 5.5 million as on Mar 31, 2011.

Airtels fast growing customer base Bharti Airtel crossed the significant milestone of 200 million customers for all territories during the quarter ended December, 2010. The companys total subscriber base has grown by 65.8% in the last calendar year. For March 2011, the company led other mobile service providers to add 3.2 million users in India, taking its mobile service subscriber base to 162.2 million in India.
Subscriber base: quarterly growth

250.0 200.0 150.0 100.0 137.0

33.9% 183.4 194.8

207.8

220.9

40.0% 35.0% 30.0% 25.0% 20.0% 15.0%

6.2% 50.0 0.0 Q4FY10 Q1FY11 Q2FY11 9.3%

6.7%

6.3%

10.0% 5.0% 0.0%

Q3FY11

Q4FY11

Subscriber base (in millions)

% Growth (QoQ)

The advantage of passive infrastructure services Bharti Infratel: Bharti Infratel, the companys subsidiary has 32,792 towers across 18 states and 11 telecom circles at the end of Q4FY11. The sharing factor for Bharti Infratels towers for the latest quarter was 1.73 times.
Bharti Infratel (standalone): number of towers & sharing factor 33,500 33,000 32,500 32,000 31,500 31,000 30,500 30,000 29,500 29,000 28,500 28,000 Q3FY10 Q4FY10 Q1FY11 Q2FY11 Q3FY11 Sharing factor Source: Company Q4FY11 Total number of towers 1.57 29,806 1.62 30,568 1.65 1.65 31,196 1.68 31,831 32,424 1.73 32,792 1.74 1.72 1.70 1.68 1.66 1.64 1.62 1.60 1.58 1.56

The total number of towers under Bharti Infratel has grown by 7.3% in the last one year.

The revenues from passive infrastructure services were Rs 2201.0 cr in Q4FY11, as compared to Rs 1945.9 cr. in Q4FY10, a growth of 13.1% YoY. The operating profit showed a growth of 12.9% at Rs 815.3 cr, up from Rs 722.4 cr for the same period.

Indus Towers: Indus Towers is a joint venture between Bharti Infratel, Vodafone and Idea It provides infrastructure services in 16 service areas. Sharing factor for Indus in Q4FY11 was 1.83 times. Indus benefits from assured tenancy from its promoters while Bharti Airtel benefits from the reduced capital expenditure, revenue maximization and the embedded value of the shareholding. Indus Towers has recently achieved a significant milestone of 200,000 tenancies. Further, Vodafone Essar is contemplating selling around 7,000 towers with at least one tenant each to Bharti Infratel or Indus Towers for a price between Rs 3200-3500 cr. 2 Bajaj Capital Centre for Investment Research

Stock Idea Bharti Airtel Ltd.

Indus is the largest independent tower company in the world having about 108,586 towers under its management as on Mar 31, 2011.

Indus Towers: shareholding Bharti Infratel Vodafone Idea

16% 42% 42%

Source: Company

Indus Towers: number of towers & sharing factor 110,000 109,000 108,000 107,000 106,000 105,000 104,901 102,938 1.71 1.75 106,438 1.80 1.78 107,789 1.83 108,586 1.84 1.82 1.80 1.78 1.76 1.74 1.72 1.70 1.68 1.66 1.64 Q3FY10 Q4FY10 Q1FY11 Q2FY11 Q3FY11 Sharing factor Source: Company Q4FY11 Total number of towers

The total number of towers under Indus has grown by 5.5% in the last one year.

104,000 103,000 102,000 101,000 100,000 99,000 1.66 102,696

Opportunities in the telemedia services Bharti Airtel has a large presence in the telemedia services that include fixed line, broadband & the newly introduced IPTV. Telemedia services had a customer base of 3.3 million as of March 31, 2011. Total net additions in subscriber base was ~39,000 in Q4FY11. ARPU for telemedia services was Rs 934 per month. These services contributed Rs 917.8 cr in Q4FY11 to the overall revenues of the company and had an EBITDA margin of 45.2%. Airtel Fixed line and DSL (Digital Subscriber Line) was available in 87 top cities in India as on Dec 31, 2011. Broadband penetration in India is approximately 1% with a mere 11.9 million broadband connections. Airtel is expected to benefit from the expected high growth in the telemedia services in the coming years as the broadband revolution is forecasted to follow the wireless revolution in India. New greenfield entrants facing significant challenge Greenfield telecom service providers are facing a tough time with operators like Uninor, Sistema Shyam, EtisalatDB, Videocon, Stel and Loop Telecom garnering a miniscule subscriber market share. It looks inevitable that in the long run, merger with the larger companies remains the most probable outcome for most of these operators. Bharti is likely to benefit from tapering competitive pressure on the domestic front, though it is tough to put an exact timeline to the occurrence of this event. 3 Bajaj Capital Centre for Investment Research

The broadband connectivity has found the pride of place in the governments to-do list because studies have shown that for every 10% increase in internet penetration, GDP climbs by 1.38%.

Stock Idea Bharti Airtel Ltd.

The total subscriber base in Africa grew 4.9% to 44.206 million in Q4FY11 from 42.124 million in Q3FY11.

The Africa opportunity The acquisition of Zains African business has given geographical diversification to Bharti Airtel. Bharti is targeting 100 million subscribers by the end of FY2013, from its business in this continent. It plans to increase its revenues to US$ 5 billion and EBITDA to US$ 2 billion by the end of the next financial year. The rest of the African countries apart from that covered by Zain, are presently untouched by Airtel and present a huge opportunity in the future. The turnaround in Bhartis Africa business has begun. Despite being involved in a price war in several African countries, revenues from Africa operations stood at US$ 924 million for Q4FY11 up 1.4% QoQ. The EBITDA stood at US$ 224 million. The EBITDA margin was at 24.2%. The net profit stood at US$ -92 million. The operating free cash flows were at US$ -158 million. The company has increased its market share marginally in Africa in the March 2011 quarter. The ARPU came down from US$ 7.3 to US$ 7.2 for the same period and the Average Minutes of Usage per user went down from 120 to 115. Bharti Airtel also has 3G licenses in 9 out of the 16 African countries it operates in and offers this service in 8 countries. Airtel Zambia intends to launch 3G network in the near future. The company is expecting more licenses in Africa in the next 6 months.
Airtels Africa coverage population in million (2009)

450

Airtel only covers 16 countries and ~44% of Africas population.

Airtel Africa Non Airtel Africa

575

Source: Company

Comparison: Airtels India & Africa business

Particulars
Mobile Penetration Average Competitors Business Model Minutes of Usage

India
70.9% 10 to 12 High usage, low pricing 449 ~ $ 4.3 ~1 cent

Africa
45% 3 to 5 Low usage, high pricing 115 ~ $ 7.2 6.2 cents Source: BCCIR, Company

Only one out of three persons owns a mobile in Africa, compared with seven out of ten in India.

ARPU (US$) ARPM (US cents)

4 Bajaj Capital Centre for Investment Research

Stock Idea Bharti Airtel Ltd.

The total minutes on network have increased by 32% in Q4FY11 compared to Q4FY10.

Increasing Total Minutes on Network

Total minutes on network (million minutes) 240,245

206,213 182,001

216,373

227,262

Q4FY10

Q1FY11

Q2FY11

Q3FY11

Q4FY11 Source: Company

The national average of active subscribers for mobile service operators stands at 70.3%.

Maximum number of active customers According to a recent TRAI report, Bharti Airtel has 91.8% active customers. Idea cellular has 90% active subscribers followed by Vodafone Essar at 76%, 66-68% for Reliance Communications, 57% for BSNL, 49.7% for Tatas GSM business and 46.5% for their CDM A business. New telecom service providers such as EtisalatDB, Stel, Uninor and Sistema Shyam have less than 50% active customers. MTNL is at the bottom of the list with 35.6% active subscribers in GSM and 27% in CDMA. Focus on rural demand Bharti Airtel has shifted focus to the rural demand in India. Revenue growth going forward for the company, apart from 3G and Africa, would be driven by the rural demand in India. Rural India constitutes 33.7% of Indias overall wireless subscriber base. Rural penetration remains low in India at less than 25%. Bharti Airtel at present has a high rural market share of ~25%.

Peer Analysis Telecom service providers: mobile subscriber base (million) March 2011

162.2 135.7 134.5 91.6 89.5 89.1 54.8 54.2

Airtel has ~20% more subscribers than its closest competitors, Reliance Communication & Vodafone. However, in CY2010 while Bhartis Indian mobile subscriber base grew by 28.3%, Aircel showed a growth of 61.7%, Tatas mobile business grew by 46.9%, Idea by 42%, Vodafone by 36% and Reliance Communications by 34%. The total industry growth was 35.3%.

Source: TRAI

5 Bajaj Capital Centre for Investment Research

Stock Idea Bharti Airtel Ltd.

One out of every five mobile customer is a Airtel subscriber.

Mobile service providers: customer market share (%) March 2011

20.0% 16.7%

16.6%

11.3%

11.0%

11.0%

6.8%

6.6%

Source: TRAI

ARPU of the mobile service providers has been declining steadily.

Mobile service providers: ARPU (Rs) comparison

Airtel

Idea

RelCom

215 182

202 167 130 122

198 168

194 161

111

107

Bharti Airtel has shown a steady decline in ARPM due to the tariff wars in the mobile services industry.

Q1FY11

Q2FY11

Q3FY11

Q4FY11

Source: Respective Company

6 Bajaj Capital Centre for Investment Research

Stock Idea Bharti Airtel Ltd.

Multiple SIM usage has impacted the MOUs of the players in the wireless telecom industry.

Mobile service providers: MOU (min) comparison

Airtel
480 415 295

Idea

RelCom

454 394 276

449

401 251

449 397

241

Q1FY11

Q2FY11

Q3FY11

Q4FY11

Source: Respective Company

Telecom service providers: comparison (consolidated financials in Rs cr.)

Company Net Sales APAT PBIDTM% APATM% PE P/BV P/S Mkt Cap

Bharti Airtel enjoys far superior PBIDT & APAT margins than its peers. It also has a much higher RONW than its competitors.

Bharti Airtel Reliance Comm. Idea Cellular Tata Comm. Tata Tele (Mah)

59467.2 22430.4 15503.2 11932.0 2303.1

5904.9 1505.8 898.7 -775.2 80.2

33.9 40.5 24.5 12.0 50.8

9.9 6.7 5.8 -6.5 3.5

24.5 13.0 28.5 0.0 38.8

3.0 0.4 2.1 1.7 -4.5

2.4 0.9 1.7 0.5 1.4

144439.1 19628.9 25651.5 5855.3 3111.4

P/E, P/BV, P/S & Mkt Cap figures are as on June 17, 2011. Net Sales, APAT, PBIDTM (%), APATM (%) statistics are for FY2011.

Key Concerns Mobile Number Portability (MNP) While some subscibers of the company can migrate to other telecom service providers attracted by lower prices, others can get attracted to the company due to its record of providing excellent service. MNP service that was launched in Haryana on Nov 25, 2010 is available throughout India since Jan 20, 2011. Temporary setback to telecom tower business Telecom towers which act as emitting points for cell phone signals, have not been getting added tenancy. Launch of 3G services and expansion plans of new telecom operators like Uninor, Videocon, Loop Telecom, Etisalat etc. were expected to create a surge in tower tenancy. But uncertainty over license conditions for new operators has put network rollouts on hold, thus affecting the growth of the tower business temporarily. TRAI recommendation for additional 2G spectrum payment Telecom Regulatory Authority of India (TRAI) has issued a recommendation that companies holding over 6.2 MHz of spectrum or radio frequencies would have to pay for the additional spectrum from April 2010 onwards. Accordingly Airtel would be required to pay Rs 4,000 cr. if these recommendations are accepted by the government. 7 Bajaj Capital Centre for Investment Research

Mobile number portability is both a concern and an opportunity for the company.

Stock Idea Bharti Airtel Ltd.

Due to the new telecom service providers offering rock bottom rates in order to entice customers from the established players, all the entrenched players except Tata Teleservices have lost market share in the last one year period.

Decline in India Customer Market Share (CMS)

Decline in customer market share (in million)

22.7%

21.8%

21.5%

20.8%

20.3%

20.0%

Q3FY10

Q4FY10

Q1FY11

Q2FY11

Q3FY11

Q4FY11

Source: Company

Decline in ARPUs (India)

ARPU (Average Revenue Per User) - Rs

Decline in ARPUs is mainly because of the intense competition, resulting in steep fall in mobile rates and also due to the companys thrust on the rural customers. In Q4FY11, Bharti Airtel Indias Average MOU (Minutes of Use) per user was 449 minutes, down -4% YoY from 468 minutes in Q4FY10. ARPM (Average Rate Per Minute) was at 43.1 paise, down -8% from 47 paise in the last quarter of FY10. ARPM is expected to improve going forward due to the increased use of 3G services and the industry players hiking the low unsustainable 2G tariffs. Conclusion

230

220

215 202 198 194

Q3FY10

Q4FY10

Q1FY11

Q2FY11

Q3FY11

Q4FY11 Source: Company

Bharti Airtel has already launched 3G services in many cities including Delhi & Mumbai garnering ~3 million 3G subscribers. The company is a market leader in this segment also. This represents a market share of appox. 30.0% out of a total ~10 mn 3G subscribers in India.

India is the fastest growing telecom market in the world. The mobile subscriber base of Bharti Airtel in India is growing at a scorching pace of ~3 million subscribers per month. The company also has the largest number of active customers (~92%) among all mobile telecom operators. The company is all set to exploit the 3G opportunity in India, as it launches these premium services across all 13 circles that it had bagged in the auction. This is expected to accelerate the increase in companys non voice revenue. Bhartis Africa operations have been stabilizing with subscribers growing steadily and its market share in the continent improving. The company is also focusing on rural customers. While one out of every 5 subscriber nationally is a Airtel customer, in case of rural customers this ratio is one out of four. 3G, Africa operations and the rural markets in India are going to be the growth drivers for the company going ahead. The mobile rates have already reached rock bottom with the new players running out of steam. This presents acquisition opportunities for Bharti in the near future. The expected broadband revolution is set to boost the revenues of the companys telemedia services arm, going further. Though Bhartis ARPUs have been declining, they are expected to stabilize at the present levels. Bharti Airtel has a market capitalization of Rs 144439.1 cr. and is trading at a share price of Rs. 380.35. The consolidated TTM EPS is Rs. 15.6 translating into a TTM PE of 24.5. The price to book value stands at 3.0. The stock is an attractive buy considering the growth prospects of the industry as well as the company. We recommend a BUY on the stock with an investment horizon of 12 mo nths and target price of Rs. 450. 8 Bajaj Capital Centre for Investment Research

Stock Idea Bharti Airtel Ltd.

A Snapshot of Airtels World

Sno. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.

Country India Bangladesh Sri Lanka Burkina Faso Chad Democratic Republic of Congo Gabon Ghana Kenya Madagascar Malawi Niger Nigeria Republic of Congo Seychelles Sierra Leone Tanzania Uganda Zambia

Remarks Airtel is the largest telecom service provider in India with 220.9 million subscribers at the end of March 2011. Airtel Bangladesh had about 3.2 million customers as on Dec 31, 2010. Airtel Lanka that had started operations on Jan 12, 2009, had ~1.8 million customers at the end of last year. Airtel Burkina Faso is the dominant player with 1.43 million customers and a 50% market share. Airtel Chad is the market leader with 69% market share. Airtel Gabon has 829,000 customers and it the leader with a market share of 61%. Airtel Ghana had about 1.76 million customers at the end of CY2010. Airtel Kenya is the second largest operator in the country with 4 million customers. Airtel is the second largest telecom service provider with 1.4 million customers and a 39% market share. Airtel Malawi is the largest operator with a 72% market share. Airtel Niger is the market leader with a 68% market share. Airtel Nigeria is the no. 3 player in the country with 15.8 million subscribers. Airtel Congo is the market leader with 55% market share. Airtel is the leading player with over 55% market share. Airtel Sierra Leone is the leading mobile service operator in the country. Airtel Tanzania is the market leader with a 38% market share. Airtel Uganda is the no. 2 player with a market share of 38%. Bharti Airtel controlled Celtel Zambia is the top mobile phone company with a 70% market share.

9 Bajaj Capital Centre for Investment Research

Stock Idea Bharti Airtel Ltd.

SWOT Analysis

Strengths

Weaknesses

Largest telecom opeartor in India: Bharti Airtel is the largest telecom service provider in India and the 5th largest integrated telecom operator in the world. Strong customer base growth: Bharti Airtel's subscriber base has grown from 137.0 mn in Mar 2010 to 220.9 mn in Mar 2011, a phenomenal growth of 61.2%. 3G service launch: The telecom operator has bagged 3G spectrum in 13 out of the 22 circles in India and plans to offer these services in all these circles (covering 65-70% of its subscriber base) by the end of March 2011. Large passive infrastructure: Bharti has 32,792 towers under Bharti Infratel and 108,586 towers unders Indus at the end of FY2011. Increase in total minutes on network: The total minutes on network have increased from 182,001 million minutes in Q4FY10 to 240,245 mn mins in Q4FY11. Maximum number of active customers: Bharti Airtel has ~92% active customers, the maximum in the industry. Focus on rural sales: The company enjoys one-fourth of the rural market share and is focused on increasing it further.

Decline in customer market share: Bharti Airtel's customer market share has declined to 20.0% in March 2011 compared to 21.8% in March 2010. However, all the major telecom service providers except Tata Teleservices have taken a hit on their market share during this period due to the new greenfield operators offering rock bottom prices Decline in ARPU's: Due to the company's focus on the rural markets, ARPU's have declined from Rs 220 in Q4FY10 to Rs 194 in Q4FY11.

Opportunities
India is the fastest growth mobile services market in the world: The mobile connections in India increased by ~20 million in March 2011 to reach 811.6 million. The high growth is expected to continue, going further. New subcriber additions through MNP: Bharti Airtel has the opportunity of attracting subscribers of other telecom service providers after the launch of Mobile Number Portability (MNP) recently, as the company has a reputation of providing excellent services. Future potential of telemedia services: The government has a huge stake in the growth of these services as a 10% growth in the broadband services results in ~1.38% growth in the GDP of the country. This presents a good opportunity for Airtel in the coming years. Opportunities in Africa: Airtel is the dominant player is most of the 16 Afrcan countries that it operates in. The remaining countries in the continent, where the company has no presence provide an opportunity for the future. Possibilty of acquistions: The new greenfield operators have not been successful in acquiring a decent revenue and customer market share, inspite of offering lower prices. This may lead to an opportunity for the bigger plaerys like Bharti to acquire these businesses in the future.

Threats
MNP can be a double edged sword: Other telecom service providers, especillay the new greenfield entrants could try to entice Airtel's customers through rock bottom prices. Temperory setback to telecom tower growth: Due to the uncertainty faced by the new operators over license conditions, the new operators have put their network rollout on hold, thus affecting the tower business. TRAI recommendation: Airtel would have to pay Rs 4,000 cr. extra, if the TRAI recommendation of charging those telecom companies that hold more 2G spectrum than 6.2 Mhz (from April 2010 onwards), are accepted.

10 Bajaj Capital Centre for Investment Research

Stock Idea Bharti Airtel Ltd.

Financials Income Statement (Quarterly): Standalone Particulars

Net Sales Total Income Total Expenditure PBIDT PBIDT Margin % Interest Depreciation Tax APAT APATM (%) Rs. Cr.

Q4FY11
16265.4 16304.2 10821.2 5483.0 33.7 682.6 2970.2 499.6 1330.6 8.2

Q3FY11
15756.0 15781.8 10774.6 5007.2 31.8 747.0 2710.7 336.6 1212.9 7.7

Q4FY10
10749.1 10806.1 6568.8 4237.3 39.4 0.0 1695.3 341.5 2102.9 19.6

QoQ (%)
3.2 3.3 0.4 9.5

YoY (%)
51.3 50.9 64.7 29.4

-8.6 9.6 48.4 9.7

75.2 46.3 -36.7

Financials (Annual): Standalone Particulars

Share Capital Networth Capital Employed Debt CWIP Inventory Sundry Debtors Cash & Bank Balance Revenues Total Income Total Expenditure PBIDT Interest Depreciation PAT Cash Flow from Operating Activities Cash Flow from Investing Activities Cash Flow from Financing Activities Free Cash Flows Dividend % EPS - Adjusted (Rs.) Debt-Equity Ratio RoNW % Asset Turnover Ratio PBIDT Margin % PAT Margin % 33.9 9.9 20.0 15.9 59467.2 59601.8 39431.8 20170.0 2181.3 10206.6 5904.9

Rs. Cr.

201103
1898.8

201003
1898.8 39614.8 53020.5 10288.1 2435.9 48.4 3182.5 2578.6 41829.5 43100.3 25369.0 17731.4 636.5 6199.4 9361.5 15456.5 -14703.1 -1374.9 2797.4 20.0 24.1 0.3 27.3 0.9 42.4 22.4

200903
1898.2 28984.8 43872.6 13517.1 4143.7 96.3 2899.8 2766.0 37352.1 37949.6 24182.7 13766.8 503.1 4672.8 8044.2 13711.6 -15175.4 2064.8 -3389.6 20.0 20.7 0.5 31.8 1.0 36.9 21.5

200803
1897.9 21664.4 32338.0 9601.7 3570.0 114.2 2839.8 703.4 27012.2 27372.3 16203.3 11168.9 386.0 3471.4 6495.4 12324.4 -18432.7 5998.7 -5109.8 0.0 16.8 0.4 39.2 1.1 41.3 24.0

200703
1895.9 11453.6 16964.3 5285.9 2470.9 91.2 1871.2 852.1 18420.2 18598.7 11192.3 7406.4 279.4 2448.7 4110.3 8466.4 -8342.5 377.1 -3096.5 0.0 10.7 0.5 43.7 1.3 40.2 22.3

200603
1893.9 7340.2 12234.3 4772.8 2436.5 38.1 1114.0 351.1 11664.1 11771.9 7714.9 4057.0 229.6 1481.9 2054.6 4869.9 -5302.9 369.8 -2473.3 0.0 5.4 0.8 34.8 1.1 34.8 17.6

5 yr CAGR %

38.5 38.3 38.6 37.8 56.9 47.1 23.5

11 Bajaj Capital Centre for Investment Research

Stock Idea Bharti Airtel Ltd.

Disclaimer:

This document has been prepared by Bajaj Capital Centre for Investment Research (BCCIR), a unit of Bajaj Capital Limited (BCL). BCL and its subsidiaries and associated companies form an integrated unit imparting investment banking, investment advisory and brokerage services in stocks, mutual funds, debt, real estate, personal finance etc. Our research analysts and sales persons provide important input into our investment banking and advisory activities. This document does not constitute an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. The information contained herein is from publicly available data or other sources believed to be reliable. We do not represent that information contained herein is accurate or complete and it should not be relied upon as such. This document is prepared for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved). The investment discussed or views expressed may not be suitable for all investors. Affiliates of BCL may have issued other reports that are inconsistent with and reach to a different conclusion from the information presented in this report. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject BCL and affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. BCL & affiliates may have used the information set forth herein before publication and may have positions in, may from time to time purchase or sell or may be materially interested in any of the securities mentioned or related securities. BCL and affiliates may from time to time solicit from, or perform investment banking, or other services for, any company mentioned herein. Without limiting any of the foregoing, in no event shall BCL, any of its affiliates or any third party involved in, or related to, computing or compiling the information have any liability for any damages of any kind. Any comments or statements made herein are those of the analyst and do not necessarily reflect those of BCL and affiliates. This Document is subject to changes without prior notice and is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material and is not for any type of circulation. Any review, retransmission, or any other use is prohibited. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. BCL will not treat recipients as customers by virtue of their receiving this report.

Disclosure of interest: 1. BCL and its affiliates have not received compensation from the company covered herein in the past twelve months for Issue Management, Capital Structure, Mergers & Acquisitions, Buyback of shares and other corporate advisory services. 2. Affiliates of BCL are currently not having any mandate from the subject company. 3. One of the Directors of Bajaj Capital Limited holds shares of this company. 4. The Equity Analyst and his/her relatives/dependents hold no shares of the company covered as on the date of publication of research on the subject company. Copyright in this document vests exclusively with BCL.

Bajaj Capital Centre for Investment Research Bajaj Capital Ltd 97, Bajaj House, Nehru Place New Delhi 110019 Tel 4169 3000, 4169 2900, Ext. 651 Email: bccir@bajajcapital.com

12 Bajaj Capital Centre for Investment Research