Buy Bharti, tgt Rs 1125: Angel Broking

Angel Broking has maintained buy rating on Bharti with target price of Rs 1125 in its May 06, 2008 report. "As for financial data and metrics, Bharti and MTN are very similar in terms of size, on the basis of market value and enterprise value (EV). Post MTN’s share price hitting a 14-year high after news about a possible takeover by Bharti, the company’s market capitalisation has exceeded that of Bharti Airtel, albeit not by a significant amount, with both being in the range of USD 39-40 billion. On the EV front, MTN is again larger than its Indian peer by about 4%, at nearly USD 42 billion. In terms of leverage, the Net Debt-Equity ratios of both companies are at very comfortable levels of 0.2x and 0.3x (Bharti and MTN, respectively). As regards the Net Debt-EBITDA ratio again, the respective levels are comfortable, at 0.4x and 0.5x respectively. On the valuation front, MTN is trading at an EV/EBITDA of 6.5x CY2009E EBITDA and at a P/E ratio of 15.3x CY2009E EPS (figures for Bharti at 8.5x and 15.7x respectively, for FY2010E)" says Angel Broking report.

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