CLSA bullish on Bharti Infratel; sees RoE doubling by FY18

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Moneycontrol Bureau

Brokerage house CLSA has retained its buy rating on Bharti Infratel with a price target of Rs 450.

“Infratel’s EV/Ebitda discount to global peers has reduced from 67% in 2013 to 35% now, on the same lines as its RoE (Return on Equity) discount. Given the higher growth and operating leverage in the business, we expect Infratel’s RoE to double by FY18 to 18% which could reduce the EV/Ebitda discount further,” says the CLSA note to clients.

“Infratel had a consolidated net cash balance of Rs 3900 crore at the end of 3QFY15, and is generating free cashflow of Rs 2000-4000 crore annually. With the build-up of cash, management has stated its intent to further return excess cash to shareholders within the legal framework which could include a special dividend or share buyback,” says the CLSA note