30 March 2020

Company Update | Sector: Telecom

Bharti Airtel
BSE SENSEX S&P CNX
28,441 8,281
CMP: INR 429 TP: INR 620(+44% ) Buy
Still a lot of juice left!
Incremental ARPU growth opportunity not captured
 Currently, the Bharti Airtel (BHARTI) stock is down ~20% from its peak due to
the Coronavirus (COVID-19) outbreak and the consequent complete lockdown
Bloomberg BHARTI IN in India.
Equity Shares (m) 5,455  Additionally, both BHARTI and Vodafone-Idea (VIL) are facing the ire of the
M.Cap.(INRb)/(USDb) 2351.6 / 32.5 Supreme Court (SC), which recently dismissed their plea toward self-
52-Week Range (INR) 569 / 305
assessment of AGR liabilities.
1, 6, 12 Rel. Per (%) 8/43/67
 We see limited impact of COVID-19, currency and crude price swings on the
12M Avg Val (INR M) 5456
Free float (%) 41.0 BHARTI stock and believe that it is the best hedged to face regulatory woes.
 Through this report, we look at how BHARTI is placed in the current tough
Financials & Valuations (INR b)
environment and the key catalysts at hand for it to deliver.
Y/E March FY20E FY21E FY22E
Sales 871.9 1,018.2 1,111.8 COVID-19 to have limited impact on earnings
EBITDA 365.8 457.5 508.4
Given the complete lockdown in India due to COVID-19, net subscriber adds
Adj. PAT 3.6 21.2 27.2
EBIT Margin (%) 42.0 44.9 45.7 (average 2-3 months) have stalled thus impacted by 1-2%. With physical
Adj. EPS (INR) 0.7 3.9 5.0 recharges being unavailable, there has been a shift to digital recharges (from
EPS Gr. (%) -107.7 479.7 28.5
15% in the last 1-2 years to 35-40% currently). In the current environment,
BV/Sh. (INR) 161.0 164.9 169.9
Ratios more tech-savvy data subscribers with higher ARPUs and longer-term
Net D:E 1.2 1.0 0.8 recharges of 90 days may see lower impact. However, the rest of feature
RoE (%) 0.5 2.4 3.0 phone subscribers doing monthly recharges (one-third the ARPU of data
RoCE (%) 3.1 4.3 5.1
Payout (%) 0.0 0.0 0.0 subscribers), could see some marginal impact as to protect these low income
Valuations subscribers (80m), BHARTI has extended free incoming calls until 17th Apr’20
EV/EBITDA (x) 9.6 7.3 6.2 with additional INR10 talk-time. This could impact 1QFY21 revenue/EBITDA
P/E (x) 641.1 110.6 86.1
P/BV (x) 2.7 2.6 2.5
by INR2.2b/INR1.8b i.e. equivalent to meager 1-2%. Against this, increased
Div. Yield (%) 0.0 0.0 0.0 data consumption should see upgrades in recharge values, thus, mitigating
FCF Yield (%) -9.1 9.3 9.6 the impact. In 4QFY20/1QFY21, we currently estimate 13%/19% revenue
Shareholding pattern (%)
growth on QoQ basis.
As On Dec-19 Sep-19 Dec-18 Currency and crude fluctuation impact much lower
Promoter 62.7 62.7 67.1 The recent sharp INR depreciation should increase BHARTI’s USD capex/debt
DII 14.1 13.2 13.9
and put some of its African business under stress due to its high crude
FII 16.5 22.4 17.2
Others 6.7 1.7 1.8 exports. However, we do not expect a meaningful impact. The USD
FII Includes depository receipts denominated India capex is ~30%, thus, 10% INR depreciation could have ~3%
increase. Similarly, ~28% of BHARTI’s debt is USD denominated while India
Stock Performance (1-year) debt is 15%. The sharp reduction in crude prices could result in revenue
softness in the short term, particularly in Nigeria, Congo and Chad. However,
BHARTI’s FCF positive position and lower leverage should have limited impact.
Expect strong ARPU increase or market share gains
We believe that BHARTI remains in a win-win situation, irrespective of the
SC’s outcome on VIL’s fortunes. The government has been pitching for a
healthy telecom market (3 private and 1 PSU player), which accentuates the
need for VIL to stay afloat. However, VIL’s survival will require a sharp ARPU
increase (potentially >30%) along with moratorium of payments to service its
regulatory and debt obligations, which could also benefit BHARTI. Further,
Research Analyst: Aliasgar Shakir(Aliasgar.Shakir@motilaloswal.com); +91 22 6129 1565
Suhel Shaikh (Suhel.Ahmad@MotilalOswal.com); +91 22 5036 2611; Anshul Aggarwal (Anshul.Aggarwal@motilaloswal.com); +91 22 5036 2511
Investors are advised to refer through important disclosures made at the last page of the Research Report.
3 September 2019 1
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Bharti Airtel

even in the worst-case scenario of no government support on AGR dues, BHARTI’s

financial position is strong enough to withstand the storm, and in fact, could lead to
significant market share gains for the company at the cost of VIL. In either case, our
workings indicate that BHARTI could deliver a marked rise in earnings; we see
potential increase of ~39% in our FY22 EBITDA estimate to INR621b (refer exhibit 1
& 2).

ARPU – Potential to reach INR200?

The recent price hike will likely take BHARTI’s ARPU to INR160 (1QFY21) despite the
COVID-19 impact as an upgrade in recharges should offset any impact due to
physical store recharge. Further, a 10% ARPU increase should pan out annually due
to mix benefit as 30-40m subscribers (>10%) shift to higher-ARPU mobile broadband
plans every year. Subsequently, BHARTI’s FY22 exit ARPU should reach over INR180.
This is still below its FY15 ARPU of ~INR200 when data subscribers (offering 2x
ARPUs) were only 20% of total subscribers v/s 50% today. We see a strong likelihood
of an industry-wide price action over the next 2-3 quarters as VIL attempts to stay
afloat by generating sufficient cash flow to service its regulatory/financial burden.
This could be through (a) postpaid ARPU increase, (b) increasing data bundle plans,
and (c) minimum recharge plans. Also, the TRAI consultation paper on floor price,
telcos’ curbing data plans and increased share of value-added services like
entertainment and banking could further drive ARPUs.

Revenue growth through market share gains

With VIL facing the risk of survival, we expect BHARTI to garner 60% subscriber
share and 50% revenue share from VIL. BHARTI’s technology-agnostic device
ecosystem is well placed to gain market share from over two-thirds of feature phone
subscribers. Even if VIL weathers the current financial woes, its weak 7-8 circles
could continue seeing sharp subscriber churn, benefiting BHARTI significantly over
the coming 2-3 quarters. Further, VIL’s ongoing network integration along with
customer worries of business continuation, could pose a strong opportunity for
peers to chase market share.

Will BHARTI lose its sheen due to collateral damage?

The incremental market share from a weakening third player in the telecom market
will certainly benefit BHARTI. However, it could also face repercussions on three
fronts: (i) erosion of Bharti Infratel’s value in SOTP, which is INR43/share i.e. 7% of
our TP, (ii) network cost increase of 2-3% i.e. 2k/3k per site due to the cut in VIL’s
tenancies and (iii) incremental capex of ~INR50b for 25-30k fresh site additions to
accommodate the traffic load on the network. Against this, overall incremental
EBITDA of over INR100b should still be significantly higher to manage the
incremental impact.

FCF generation overlooked

Over the last decade, BHARTI has been saddled with high capex, spectrum
acquisition cost and depressed EBITDA, which has suppressed its FCF. However, we
expect the potential restoration of the past era (2G) when telcos had the
opportunity to monetize investments for a prolonged period. With a large part of
the heavy lifting toward 4G network in place, incremental capex should be in check,
while EBITDA should see a marked improvement. This should provide an
opportunity to deleverage the balance sheet. Subsequently, we expect FCF (post
interest) to increase to over INR300b in FY22 (if EBITDA grows to INR621b) from
INR25b in FY20 and negative in FY19.

30 March 2020 2
 Bharti Airtel

RoCE becoming relevant

Over the last 10 years, BHARTI’s RoCE was barely in mid-single-digit due to the hyper
competitive landscape and continued capex toward technology advancements,
spectrum renewals and investments in Africa. Now with benign competition and
limited possibility of a new player’s entry, ARPUs could be determined to at least
cover the WACC. In our view, at EBITDA of INR621b, BHARTI could garner pre-tax
RoCE of ~19%.

Risk of capex intensity

We do not see any material investments in 5G to happen over the next 3-4 years as
(a) new use cases for 5G are few and far, and (b) incremental consumer benefit is
limited, as data speed could easily be dealt by 4G investments. Further, unlike in the
past when 4G investment was inevitable due to the entry of a new player, we don’t
see any pressure on technology or spectrum investments.

Valuation and view

Our estimates do not capture the potential upside for BHARTI from incremental
ARPU growth or market share gains, but factor in the AGR liability impact of
INR343b (according to BHARTI) as against Department of Telecommunications’
(DoT) figure of INR445b. In either case, there would be EBITDA growth opportunity.
EBITDA of INR621b (based on our ARPU workings) could generate FCF yield (post
interest) of 11%. Thus, 10x EV/EBITDA could derive a TP of INR910 after factoring in
the impact of Bharti Infratel. Further, this does not capture the potential
deleveraging benefits. We maintain our Buy rating with SOTP-based TP of INR620,
assigning 11x (to capture the incremental earnings upside) on India wireless EBITDA
and Africa at 6x.

30 March 2020 3
 Bharti Airtel

ARPU increase or market share gains?

Price hike taken for VIL’s survival

We believe that ARPU increase is a function of VIL’s survival, in line with the
government’s stated desire of having a healthy telecom market (with 3-private/1-
PSU players). Assuming INR300b of annual cash requirement (includes capex, cash
interest cost, AGR repayment and deferred spectrum liability), VIL needs ARPU of
INR188 to survive. The government has provided a 2-year moratorium until FY22 on
deferred spectrum dues, and thus, the next payment should come up in FY23. Thus,
VIL will need additional ~39% ARPU increase over the next 6-9 months to fund its
annual cash requirement, assuming no material market share churn. This may
provide incremental EBITDA upside of 39%/50% for BHARTI/RJio.

Exhibit 2: At 39% ARPU hike (needed by VIL to survive),

Exhibit 1: Price hike required by VIL to survive BHARTI/RJio’s incremental EBITDA
(Amount in INR b) FY22 Company Bharti RJio
Capex 52
(Amount in INR b) FY22 FY22
Cash Interest 30
Deferred spectrum liability 165 EBITDA 447 521
AGR payment 52 ARPU (INR) 179 163
Total requirement 300 Increase in ARPU due to VIL price hike (%) 39% 39%
EBITDA (pre IND AS 116) 153
New ARPU 249 227
Incremental EBITDA required 147
Incremental revenue required 210 Subscribers (m) 297 483
ARPU (INR) 135 Incremental revenue 248 369
Subscribers (m) 332
Incremental EBITDA 174 258
ARPU hike required (INR) 53
New ARPU (INR) 188 New EBITDA 621 779
Increase in ARPU required (%) 39% Increase in EBITDA (%) 39% 50%
Source: MOFSL, Company Source: MOFSL, Company

Exhibit 3: BHARTI’s ARPU could reach INR237 in FY22 (to

save VIL) Exhibit 4: Postpaid subscribers down since 1QFY20
Postpaid subs (m)
Monthly ARPU (INR)
237
18.6

18.5
18.5

18.4
18.3

18.2
17.7
17.5
17.3
16.9
16.4

201 188 185 194 198 193

15.7
15.7
15.1

177 165 179

14.3

14.3
14.1
13.6
12.9
12.2

133 115 134

11.7
11.3
10.6

4QFY15

2QFY20
1QFY15
2QFY15
3QFY15

1QFY16
2QFY16
3QFY16
4QFY16
1QFY17
2QFY17
3QFY17
4QFY17
1QFY18
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
1QFY20

3QFY20

FY11 FY14 FY17 FY20E Potential

FY22E

Revenue increase through market share gains

With VIL’s survival under threat, RJio and BHARTI could gain disproportionately, in
our view. Thus, irrespective of an adverse ruling, BHARTI has best hedged its
position even assuming that it pays the AGR liability. Our workings (in case of VIL
shutdown) indicate that BHARTI will gain 60% subscriber share, while the revenue
share will be split equally between BHARTI and RJio. We believe that BHARTI would

30 March 2020 4
 Bharti Airtel

gain 80% of VIL’s low-ARPU feature phone subscribers as shifting to RJio would
require customers to buy Jiophone, which may not be feasible for them. We expect
postpaid and non-bundle high-ARPU customers to be split equally between both
BHARTI/RJio while broadband customers should be split in a 40:60 ratio, which
should provide them with incremental revenues of INR228b/INR245b, equivalent to
20%/26% jump from our current FY22 estimates.

Another scenario is that both BHARTI/RJio gain a subscriber share of 40%/60%,

which could provide additional EBITDA of INR150b/INR100b at 50% margin, implying
a jump of 29%/22% on FY22E EBITDA to INR671b/INR547b.

Exhibit 5: VIL customers transition to BHARTI/RJio – customer split at ~60%/40% while revenue split is equal

VIL subscribers
304m

Broadband (prepaid) Post-paid Feature phone Non-bundle (high ARPU)

Subs: 118m Subs: 23m Subs: 100m Subs: 62m
ARPU: INR170 ARPU: INR250 ARPU: INR40 ARPU: INR155

Bharti: 40% Bharti: 50% Bharti: 80% Bharti: 50%

Subs: 47m Subs: 11.5m Subs: 80m Subs: 31m

Revenue: INR92.7b Revenue: INR34.7b Revenue: INR38.4b Revenue: INR62.0b

RJio: 60% RJio: 50% RJio: 20% RJio: 50%

Subs: 71m Subs: 11.5m Subs: 20m Subs: 31m

Revenue: INR138.0b Revenue: INR34.7b Revenue: INR9.6b Revenue: INR62.0b

Source: MOFSL, Company

Exhibit 6: BHARTI/VIL customer split

Bharti/VIL
subscribers
283m/304m

Broadband (prepaid) Post-paid Feature phone Non-bundle (high ARPU)

Bharti Subs: 124m Bharti Subs: 16m Bharti Subs: 70m Bharti Subs: 53m
VIL Subs: 118m VIL Subs: 13m VIL subs: 100m VIL subs: 62m

Source: MOFSL, Company

30 March 2020 5
 Bharti Airtel

Exhibit 7: Duopoly market – a big EBITDA trigger (40:60 split)

Bharti/RJio gains 40%/60% of VIL subscribers
Particulars Bharti RJio
% of VIL customers acquired 40% 60%
Customer acquired by incumbents 122 182
Increase in annual revenue (INRb) 200 300
Incremental EBITDA at 50% (INRb) - A 100 150
FY22E EBITDA - B 447 521
New EBITDA post acquisition of VIL subs (A+B) 547 671
Increase in EBITDA (%) - A/B 22% 29%
Total VIL subscribers (m) 304
FY20E ARPU (post price hikes) 137
Annual ARPU (INR) 1,645
Source: Company, MOFSL

Exhibit 8: BHARTI/RJio’s EBITDA to reach INR547b/INR671b Exhibit 9: BHARTI and RJio gain in EBITDA/share
EBITDA Pre-VIL acquisition EBITDA Post-VIL Acquisition 25

671
18
547 521
447

Bharti Airtel Reliance Jio Bharti Airtel Reliance Jio

Source: MOFSL, Company Source: MOFSL, Company

Exhibit 10: Duopoly market – a big EBITDA trigger (50:50 split)

Bharti/RJIL gains 50%/50% of VIL subscribers
Particulars Bharti RJio
% of VIL customers acquired 50% 50%
Customer acquired by incumbents 152 152
Increase in annual revenue (INRb) 250 250
Incremental EBITDA at 50% (INRb) - A 125 125
FY22E EBITDA – B 447 521
New EBITDA post acquisition of VIL subs (A+B) 572 646
Increase in EBITDA (%) - A/B 28% 24%
Total VIL subscribers (m) 304
FY20E ARPU (post price hikes) 137
Annual ARPU (INR) 1,645
Source: Company, MOFSL

30 March 2020 6
 Bharti Airtel

Exhibit 11: BHARTI/RJio’s EBITDA to reach INR572b/INR646b Exhibit 12: BHARTI and RJio gain in EBITDA/share
EBITDA Pre-VIL acquisition EBITDA Post-VIL Acquisition
23
646
572
521
447

21

Bharti Airtel Reliance Jio Bharti Airtel Reliance Jio

Source: MOFSL, Company Source: MOFSL, Company

Incremental cost for servicing VIL subscribers may not be significant

Currently, exponential data volume increase coming from unlimited plans has
burdened networks, and thus, speeds have turned subpar. VIL’s 118m broadband
customers and 3.8b GB of data traffic could increase BHARTI/RJio’s traffic volume by
30-40%. However, managements have indicated that they have options for
debottlenecking the network via spectrum re-farming, densification and backhaul
through massive multi-input multi-output (MIMO) and fiberization. Our workings
suggest that the extra traffic volume will have minimal impact on BHARTI’s network
cost, which will likely increase 2-5% with 0.6-1.2% impact on consolidated EBITDA.
Second, it would require BHARTI to add 25-30k incremental sites with additional
one-time capex of INR50b to increase its capacity, which is equivalent to ~1.3% of its
current enterprise value. Thus, an increase in traffic should have minimal impact on
the company. However, the existence of Bharti Infratel could be questioned as its
primary role of reducing network cost through sharing may be contested. This could
erode the value of Bharti Infratel, which currently contributes 7-8% of our TP.

Exhibit 13: Network cost increase minimal (if VIL dissolves) Exhibit 14: Capex to grow capacity ~1% of EV (if VIL dissolves)
(Amount in INR m) Min impact Max impact (Amount in INR m)
Cost/tower 2,000 3,000 Incremental towers (000's) 25
Towers 0.15 0.19 Cost/tower 2
Annual incremental cost 3,600 6,840 Total cost 50,000
Network cost 1,51,231 1,51,231 Market cap (INR b) 28,72,388
Increase in cost (%) 2.4% 4.5% Debt (INR b) 8,47,664
EBITDA in FY22E 5,91,000 5,91,000 EV (INR b) 37,20,052
Impact on consol EBITDA 0.6% 1.2% Impact (%) 1.3%
Source: MOFSL, Company Source: MOFSL, Company

Exhibit 15: Impact of BHIN’s market cap in BHARTI’s TP

(Amount in INR b)
Bharti Infratel fair proportionate value 235
Bharti's shares outstanding (b) 5
Bharti Infratel fair value/share (INR) 43
Bharti TP including Infratel (INR) 655
Bharti TP excluding Infratel (INR) 612
Impact (%) -6.6%
Source: MOFSL, Company

30 March 2020 7
 Bharti Airtel

FCF and RoCE to turn sizeable

Since FY12, BHARTI’s RoCE has been on a downward curve and is struggling in mid-
single-digit due to (a) ballooning capital employed, which can be attributed to
investments in new technology, spectrum renewals and investments in Africa, and
(b) dwindling profitability given the pressure on ARPUs with RJio turning aggressive.

However, with ARPU increase becoming a reality, BHARTI’s management has started
focusing on RoCE. Recently, BHARTI’s Managing Director, Mr. Gopal Vittal said,
“Bharti’s RoCE would be just head above water at an ARPU of INR200.” Going
forward, the company should see benefit of (a) improving earnings due to an
increase in ARPU, and (b) the capex cycle passing its peak. Our workings indicate
that with a further ARPU increase of 39% to keep VIL alive, BHARTI’s EBITDA of
INR621b would fetch RoCE of 19% on a pre-tax basis. This could be a key valuation
trigger as the company would start garnering a reasonable RoCE. Further, at
INR621b EBITDA level and coupled with stable capex and falling interest cost, FCF
generation could be ~INR300b with a yield of 10-11% even at current valuation. This
again should be a strong positive for the company, which had negative FCF of
INR220b in FY19 and just reached FCF breakeven in FY20.

Exhibit 16: BHARTI – Healthy gains over 2002-08, 2008-19 remained a drag, 2020 has started to reap price hike benefits
Market Cap (NR b) RoCE (%) RoE (%) MARKET PARIAH MARKET DARLING
MARKET DARLING
2500 45.0

2000
Africa 30.0
1500 Acquisition
2G rollout
15.0
RCOM Launch
1000
New operators launch 3G 0.0
500 telco operations in 4G rollout: 2012-15
rollout Price Hike
2008-09 Spectrum renewals
0 -15.0
FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
Source: MOFSL, Bloomberg

Exhibit 17: FCF yield has potential to reach 11% in FY22 Exhibit 18: RoCE could reach 19% in FY22
FCF post Interest (INR b) Yield (%) 309/ 44.2 RoCE (%)
11%
4% 6%
2% 2% 1% 0% 1% 19%
-4% -3% 19.0
-9% -10% 118 169 9.5 5.9
34 52 29 -7 -62 3.1 3.8 5.8 6.1 5.3 4.6 3.1 4.3 5.1
-77 26 -2.5
-187 -218
FY11

FY14

FY17
FY09
FY10

FY12
FY13

FY15
FY16

FY18
FY19
FY20E

Potential FY22E
FY21E
FY22E
FY18

Potential FY22E
FY12

FY13

FY14

FY15

FY16

FY17

FY19

FY20E

FY21E

FY22E

30 March 2020 8
 Bharti Airtel

Valuation and view

Buy with TP of INR620
Our estimates do not capture potential gains from (a) ARPU hike required for VIL to
survive, and (b) market share gains resulting from the weakening third player (VIL).
However, we have fully captured the AGR liabilities’ impact of INR343b in our SOTP
model. We have merely factored in a mix-driven ARPU improvement of 2%
quarterly, but no further price hike, which is needed to maintain industry viability.
Subsequently, we have captured a higher multiple in our SOTP-based model,
wherein we have assigned 11x EV/EBITDA to BHARTI’s India wireless business and 6x
EV/EBITDA to its Africa business on FY22E. Our TP stands at INR620, Maintain Buy.

Exhibit 19: Bharti Airtel — SOTP based on FY22

Proportionate
EBITDA Ownership EV/ Fair Value Value/
EBITDA
(INR b) (%) EBITDA (x) (INR b) Share (INR)
(INR b)
India SA business (excl. towers) 329 100% 329 11 3,759 689
Tower business (15% discount to fair value) 53.5% 235 43
Africa business 138 55.2% 76 6 462 85
Less net debt 737 135
AGR Liability 343 63
Total Value 3719 620
Shares o/s (b) 5.5
CMP 429
Upside (%) 45
Source: Company, MOFSL

Potential valuation gains from ARPU hike or market share gain

BHARTI has a potential to garner EBITDA of INR621b in FY22 from the ARPU hike
opportunity arising from VIL’s survival needs (refer exhibits 1 & 2). This could lead to
FCF yield of ~11% in FY22 with pre-tax RoCE of 19%. In case of no government
support and shutdown of VIL, BHARTI should garner incremental EBITDA through
market share gains. Thus, in both scenarios, the company is likely to garner
additional EBITDA. At EV/EBITDA of 10x at consolidated level, BHARTI could garner a
target price of ~INR910 after factoring in the impact of Bharti Infratel.

Exhibit 20: Potential TP from increase in market share or ARPU hike opportunity
EV/EBITDA (x) 10
EV 620,000
Mkt Cap 520,000
No of Shares 545
TP 910
CMP 525
Upside 73%
Source: MOFSL, Company

30 March 2020 9
 Bharti Airtel

BHARTI revises AGR liabilities much below earlier provisioning

According to DoT, BHARTI/VIL’s current outstanding AGR dues stand at
INR440b/INR580b while the companies have repaid INR180b/INR65b of total
outstanding dues. Even compared to BHARTI/VIL’s own provisioning of
INR343b/INR442b in 2QFY20, the repayment is much lower. BHARTI has stated that
(based on its self-assessment) it has paid INR130b, while additional INR50b is ad-hoc
payment to cover the difference against DoT’s calculation.

We have factored in AGR liabilities of INR343b based on the company’s earlier

estimate, which is INR163b lower than its own provisioning of INR343b i.e.
INR30/share in 2QFY20. If the liability reduces to the current estimate in the future,
the company’s share price could potentially increase by INR30/share.

Exhibit 21: Telcos’ AGR liabilities outstanding according to DoT (INR b)

Company License fee dues SUC dues Total dues Provisioning in 2QFY20 Repayment
Idea Cellular Ltd 85 67 152
Vodafone Group of Companies 198 180 378
Vodafone Idea 283 247 530 442 65
Bharti Airtel Group of Companies 217 139 356 343 180
Telenor 20 2 22
TTSL 100 38 138 42
Reliance Jio 0 0 1
Bharat Sanchar Nigam Limited 21 29 50
Mahanagar Telecom Nigam Limited 25 6 31
Aircel Group of Companies 79 24 102
Etisalat DB Telecom Private Limited 0 0 0
Quadrant Televentures Limited 1 1 2
S Tel Pvt Ltd 0 0 1
Videocon Communications Ltd. 10 3 13
Sistema Shyam Teleservices Ltd. 3 1 4
Reliance Communication/Reliance
165 47 211
Telecom Limited
Loop Telecom Pvt. Ltd. 2 0 2
Total 926 537 1,463
Source: GOI

30 March 2020 10
 Bharti Airtel

Exhibit 22: Effect of foreign currency rates on PBT and Shareholder’s Equity
FY19 FY18
Change in Change in
currency Effect on Effect on % Impact % Impact currency Effect on Effect on % Impact % Impact
figures in INRm
exchange PBT equity on PBT on Equity exchange PBT equity on PBT on Equity
rate rate
US Dollar +5% (10,269) (9,109) 59% -2% +5% (8,823) (8,796) -27% -1%
-5% 10,269 9,109 -59% 2% -5% 8,823 8,796 27% 1%
Euro +5% (2,368) (1,590) 14% 0% +5% 1,712 (1,844) 5% 0%
-5% 2,368 1,590 -14% 0% -5% (1,712) 1,844 -5% 0%
Others +5% (905) - 5% 0% +5% 1 - 0% 0%
-5% 905 - -5% 0% -5% (1) - 0% 0%
**FY19 PBT loss of INR17.3b, negative effect indicates rise in losses Source: MOFSL, Company
**FY18 PBT profit of INR32.7b

Exhibit 23: Foreign currency borrowings in FY19/FY18, additional FCCB (USD b) amended below; FY19 to reflect FY20
borrowings
All figures in INRb FY19 FY18
Weighted Weighted
Currency of Total Floating rate Fixed rate Total Floating rate Fixed rate
average rate of average rate
borrowing borrowings borrowings borrowings borrowings borrowings borrowings
Interest of Interest
INR 9.23% 781.0 202.1 578.9 INR 9.33% 603.5 106.3 497.2
USD 4.66% 347.6 122.4 225.2 USD 5.47% 337.3 58.6 278.7
Euro 3.03% 71.8 13.8 58.0 Euro 3.73% 140.0 - 140.0
CHF 3.00% 24.3 - 24.3 CHF 3.00% 23.8 - 23.8
JPY 0.60% 14.0 14.0 4.3 XAF 6.61% 4.7 - 4.7
XAF 7.40% 4.3 - 6.3 XOF 6.80% 7.0 1.4 5.6
XOF 6.69% 6.3 - 0.1 Others 8.48% to 19% 5.3 2.8 2.5
Others 9.64% to 20.64% 7.9 7.8 0.0
Total in FY19 1,257.1 360.2 897.0 Total in FY18 1,121.7 169.1 952.6
USD** 1.50% 72.0 72.0 0.0
**Additional USD1b FCCB issued in Jan'20, assuming floating rate Source: MOFSL, Company

30 March 2020 11
 Bharti Airtel

Key Exhibits
Exhibit 24: Potential to generate INR1.3b revenue in FY22 (INR b, %)

Consol revenue (INR b) Consol EBITDA margin (%) 49.5%

44.9 45.7
42.0
33.9 35.3 37.0 36.4
33.1 30.2 32.3 32.0

715 769 857 920 963 955 826 808 872 1018 1112 1319
FY15

Potential FY22E
FY12

FY13

FY14

FY16

FY17

FY18

FY19

FY20E

FY21E

FY22E
Source: MOFSL, Company

Exhibit 25: Large target market, yet untapped Exhibit 26: Smartphone penetration has improved from 14%
to 50%
VLR subs:
981m Feature Phones Smartphones
Data Users:
665 m
Smartphone
users: 400m 263 400
Broadband 83
subs:624m

442 496
Premium 400
subs:
101m
FY13 FY17 FY19
Source: Company, MOFSL Source: Company, MOFSL

Exhibit 27: BHARTI’s active SMS pre-RJio (%) Exhibit 28: BHARTI’s active SMS increase in Dec’19 (%)

6.7

30.8 27.4 Bharti Bharti

32.0

Vodafone 31.0 Vodafone Idea

Idea RJio

21.0 Other players Other players

20.8
30.3

Source: TRAI, MOFSL Source: TRAI, MOFSL

30 March 2020 12
 Bharti Airtel

Exhibit 30: BHARTI maintains 30-35% of incremental MBB

Exhibit 29: BHARTI steadily holding on with ~30% RMS market share
Bharti Vodafone Idea RJio Other players Bharti Vodafone-Idea RJio
150
50.0
100
40.0
30.0 50
20.0
0
10.0
0.0 -50

Jul-19
Jun-19
May-19

Aug-19

Nov-19
Sep-19

Oct-19
-10.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
FY18 FY19 FY20

Source: Company, MOFSL Source: Company, MOFSL

Exhibit 31: BHARTI continues to add ~3m incremental MBB customers

Bharti Vodafone Idea RJio

9.3
9.1 5.6
1.9 8.2
8.3 4.1
9.5 8.5 8.4 3.6
7.8
10.0 8.1 7.0
6.9 1.5 7.1 0.5
0.4 0.4 0.2 5.0
1.8 2.5 -0.8 3.1 2.5 2.8
-0.6 1.1 0.1
0.0 -0.5 -1.3 -1.4
Jul-19
Jun-19
Apr-19

May-19

Nov-19
Jan-19

Aug-19

Dec-19
Feb-19

Mar-19

Sep-19

Oct-19
Source: MOFSL, TRAI

30 March 2020 13
 Bharti Airtel

Financials and Valuations

Consolidated - Income Statement (INR m)
Y/E March FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY21E FY22E
Total Income from Operations 8,57,461 9,20,394 9,65,321 9,54,683 8,26,388 8,07,802 8,71,853 10,18,199 11,11,764
Change (%) 11.5 7.3 4.9 -1.1 -13.4 -2.2 7.9 16.8 9.2
Total Expenditure 5,80,865 6,08,118 6,25,479 6,01,386 5,25,597 5,49,613 5,06,038 5,60,702 6,03,392
% of Sales 67.7 66.1 64.8 63.0 63.6 68.0 58.0 55.1 54.3
EBITDA 2,76,596 3,12,276 3,39,842 3,53,297 3,00,791 2,58,189 3,65,815 4,57,497 5,08,372
Margin (%) 32.3 33.9 35.2 37.0 36.4 32.0 42.0 44.9 45.7
Depreciation 1,56,496 1,55,311 1,74,498 1,97,730 1,92,431 2,13,475 2,76,649 3,11,962 3,33,784
EBIT 1,20,100 1,56,965 1,65,344 1,55,567 1,08,360 44,714 89,166 1,45,535 1,74,588
Int. and Finance Charges 48,381 48,463 69,135 76,974 80,715 95,894 1,20,134 1,13,532 1,09,240
Other Income 6,385 6,588 10,513 10,336 12,956 4,574 8,930 8,160 8,160
PBT bef. EO Exp. 78,104 1,15,090 1,06,722 88,929 40,601 -46,606 -22,038 40,163 73,508
EO Items 538 -7,960 21,741 -11,697 -7,931 29,288 -3,32,304 0 0
PBT after EO Exp. 78,642 1,07,130 1,28,463 77,232 32,670 -17,318 -3,54,342 40,163 73,508
Total Tax 48,449 54,047 59,533 34,819 10,835 -34,193 -99,880 11,647 21,317
Tax Rate (%) 61.6 50.4 46.3 45.1 33.2 197.4 28.2 29.0 29.0
Minority Interest 2,467 1,248 8,163 4,416 10,845 12,780 -24,683 7,357 24,999
Reported PAT 27,726 51,835 60,767 37,997 10,990 4,095 -2,29,780 21,159 27,191
Adjusted PAT 27,519 55,779 49,101 44,421 13,960 -34,943 3,650 21,159 27,191
Change (%) 43.0 102.7 -12.0 -9.5 -68.6 -350.3 -110.4 479.7 28.5
Margin (%) 3.2 6.1 5.1 4.7 1.7 -4.3 0.4 2.1 2.4

Consolidated - Balance Sheet (INR m)

Y/E March FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY21E FY22E
Equity Share Capital 19,987 19,987 19,987 19,987 19,987 19,987 27,273 27,273 27,273
Total Reserves 5,77,573 5,99,577 6,47,706 6,54,576 6,75,357 6,94,235 8,51,169 8,72,328 8,99,519
Net Worth 5,97,560 6,19,564 6,67,693 6,74,563 6,95,344 7,14,222 8,78,442 8,99,601 9,26,792
Minority Interest 42,102 48,525 54,981 68,750 88,139 1,35,258 1,10,575 1,17,932 1,42,931
Total Loans 7,58,958 8,06,839 10,04,526 10,72,877 11,13,335 12,54,283 16,53,293 16,34,900 16,14,667
Deferred Tax Liabilities -45,777 -44,392 -34,226 -16,766 -22,118 -82,556 -82,556 -82,556 -82,556
Capital Employed 13,52,843 14,30,536 16,92,974 17,99,424 18,74,700 20,21,207 25,59,755 25,69,876 26,01,834
Net Fixed Assets 14,06,145 15,01,440 17,79,948 18,90,736 15,89,357 16,83,662 22,81,985 21,73,023 20,42,238
Total Investments 1,55,308 1,70,357 1,19,671 1,81,552 1,80,406 1,76,044 1,29,812 1,29,812 1,29,812
Curr. Assets, Loans & Adv. 2,07,692 2,26,519 3,10,876 2,34,170 3,26,564 3,81,895 8,03,194 9,43,233 11,07,395
Inventory 1,422 1,339 1,692 488 693 884 818 1,170 1,001
Account Receivables 62,441 67,252 55,039 47,402 58,830 43,006 52,540 59,044 62,793
Cash and Bank Balance 49,808 11,719 37,087 12,817 47,886 62,121 4,47,577 5,94,409 7,40,972
Loans and Advances 94,021 1,46,209 2,17,058 1,73,462 2,19,155 2,75,884 3,02,259 2,88,610 3,02,629
Curr. Liability & Prov. 4,16,302 4,67,781 5,17,520 5,07,034 6,01,786 6,41,389 6,55,236 6,76,191 6,77,612
Account Payables 4,04,533 4,59,472 5,07,838 4,97,348 5,77,285 6,21,206 6,27,192 6,47,913 6,44,392
Provisions 11,769 8,309 9,682 9,686 24,501 20,183 28,044 28,278 33,220
Net Current Assets -2,08,610 -2,41,262 -2,06,645 -2,72,865 -2,75,222 -2,59,494 1,47,958 2,67,042 4,29,784
Appl. of Funds 13,52,843 14,30,536 16,92,974 17,99,424 18,74,700 20,21,207 25,59,755 25,69,876 26,01,834
E: MOFSL Estimates

30 March 2020 14
 Bharti Airtel

Financials and Valuations

Ratios
Y/E March FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY21E FY22E
Basic (INR)
EPS 6.9 14.0 12.3 11.1 3.5 -8.7 0.7 3.9 5.0
Cash EPS 46.0 52.8 55.9 60.6 51.6 44.7 51.4 61.1 66.2
BV/Share 149.5 155.0 168.8 168.8 173.9 178.7 161.0 164.9 169.9
DPS 1.8 2.2 1.4 1.0 1.0 0.0 0.0 0.0 0.0
Payout (%) 30.2 19.9 10.8 12.7 43.8 0.0 0.0 0.0 0.0
Valuation (x)
P/E 76.6 37.8 42.9 47.4 122.8 -49.1 641.1 110.6 86.1
Cash P/E 11.4 10.0 9.4 8.7 8.3 9.6 8.3 7.0 6.5
P/BV 3.5 3.4 3.1 3.1 2.5 2.4 2.7 2.6 2.5
EV/Sales 3.3 3.2 3.2 3.3 3.4 3.6 4.1 3.3 2.9
EV/EBITDA 10.2 9.3 9.0 8.7 8.9 10.9 9.6 7.3 6.2
Dividend Yield (%) 0.3 0.4 0.3 0.2 0.2 0.0 0.0 0.0 0.0
Return Ratios (%)
RoE 5.0 9.2 7.6 6.6 2.0 -5.0 0.5 2.4 3.0
RoCE 3.8 5.8 6.1 5.3 4.6 -2.5 3.1 4.3 5.1
RoIC 4.2 6.5 6.4 5.4 4.5 -2.6 3.5 5.4 6.9
Working Capital Ratios
Asset Turnover (x) 0.6 0.6 0.6 0.5 0.4 0.4 0.3 0.4 0.4
Debtor (Days) 27 27 21 18 26 19 22 21 21
Leverage Ratio (x)
Net Debt/Equity 0.9 1.0 1.3 1.3 1.3 1.4 1.2 1.0 0.8

Consolidated - Cash Flow Statement (INR m)

Y/E March FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY21E FY22E
OP/(Loss) before Tax 78,643 1,07,130 1,28,463 77,233 32,670 -17,318 -3,54,342 40,163 73,508
Depreciation 1,56,496 1,55,311 1,74,498 1,97,730 1,92,431 2,13,475 2,76,649 3,11,962 3,33,784
Interest & Finance Charges 58,788 73,252 85,461 95,466 93,255 1,10,134 1,33,095 1,47,364 1,44,366
Direct Taxes Paid -35,039 -46,111 -46,836 -31,587 -13,723 -11,706 99,880 -11,647 -21,317
(Inc)/Dec in WC 17,533 -1,639 -3,955 -27,429 5,906 -58,196 -21,996 27,748 -16,179
CF from Operations 2,76,421 2,87,943 3,37,631 3,11,413 3,10,539 2,36,389 1,33,286 5,15,590 5,14,162
Others -14,095 -11,925 -58,208 -19,104 -12,001 -38,509 0 0 0
CF from Operating incl EO 2,62,326 2,76,018 2,79,423 2,92,309 2,98,538 1,97,880 1,33,286 5,15,590 5,14,162
(Inc)/Dec in FA -1,74,659 -2,09,786 -2,70,967 -3,84,045 -2,67,262 -3,05,270 -4,53,977 -2,03,000 -2,03,000
Free Cash Flow 87,667 66,232 8,456 -91,736 31,276 -1,07,390 -3,20,691 3,12,590 3,11,162
(Pur)/Sale of Investments -36,886 -11,649 68,115 -817 -33,322 924 46,232 0 0
Others -27,955 14,088 60,595 69,308 40,326 44,143 24,806 24,806 24,806
CF from Investments -2,39,500 -2,07,347 -1,42,257 -3,15,554 -2,60,258 -2,60,203 -3,82,939 -1,78,194 -1,78,194
Issue of Shares 67,956 0 984 1,245 21 98,932 3,94,000 0 0
Inc/(Dec) in Debt 14,252 -72,451 -1,17,833 9,353 40,073 1,05,883 3,99,010 -18,394 -20,233
Interest Paid -37,620 -33,887 -32,890 -58,566 -44,041 -76,171 -1,33,095 -1,47,364 -1,44,366
Dividend Paid -6,735 -21,399 -15,304 -9,168 -32,652 -46,617 0 0 0
Others -12,182 31,210 46,925 52,866 56,085 12,611 0 0 0
CF from Fin. Activity 25,671 -96,527 -1,18,118 -4,270 19,486 94,638 6,59,915 -1,65,758 -1,64,599
Inc/Dec of Cash 48,497 -27,856 19,048 -27,515 57,766 32,315 4,10,262 1,71,638 1,71,369
Opening Balance 1,311 39,575 -1,413 17,635 -9,880 28,468 37,315 4,22,771 5,69,603
Closing Balance 49,808 11,719 37,087 12,817 47,886 62,121 4,47,577 5,94,409 7,40,972
E: MOFSL Estimates

30 March 2020 15
 Bharti Airtel

NOTES

30 March 2020 16
 Bharti Airtel

Explanation of Investment Rating

Investment Rating Expected return (over 12-month)
BUY >=15%
SELL < - 10%
NEUTRAL < - 10 % to 15%
UNDER REVIEW Rating may undergo a change
NOT RATED We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
products. MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are
available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a
registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and
National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National
Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance
Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products. Details of associate entities of Motilal Oswal Financial Services Limited are
available on the website at http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report
should be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific
merchant banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the
website at https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at www.nseindia.com, www.bseindia.com. Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated
from MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
or use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers
Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any
brokerage and investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is
intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as
"major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which
this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration
provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange
Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-
dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,
of which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the
SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company

30 March 2020 17
 Bharti Airtel

********************************************************************************************************************************
The associates of MOFSL may have:
- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.

The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Terms & Conditions:
This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent
of MOFSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in
nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The
report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as
customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or
distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for
informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing
in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.
The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. 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), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views
expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade
securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and
should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from
time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to
perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or
may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on,
directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. 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 MOFSL 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.
Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost
revenue or lost profits that may arise from or in connection with the use of the information. The person accessing this information specifically agrees to exempt MOFSL or any of its
affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such
misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person
accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263;
Website www.motilaloswal.com.CIN no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:
INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth
Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is
a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.
Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.
Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no
assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance
Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.

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