Bharti Airtel’s superior execution quality is reflected in its strong performance in the last 8-10 quarters; 25% YoY growth in consolidated EBITDA, despite no tariff hikes; and consistent subscriber and revenue market share gains.

The key worry is high capex intensity suppressing FCF. Given the: 1) continued growth in EBITDA, 2) peak capex is behind it for the next four quarters, and 3) rights issue, there could be potential deleveraging of Rs 200-300 billion over the next four quarters.

There are four key moats in the company that help it tap wider growth avenues: a) Airtel Payments bank is leveraging its reach and scale, b.) Enterprise business is seeing new areas of double digit growth, c) Premiumization opportunity across the customer value chain, and d) leveraging Data capabilities to provide targeted offerings.

Motilal Oswal Financial Services maintains 'Buy' rating on Bharti Airtel with target price of Rs 860 per share.

The broking firm expects 20% CAGR in consolidated EBITDA over FY21-23E on the back of 23% CAGR in Mobile India EBITDA. "We believe strong earnings growth can be achieved even without a tariff hike. hike. We see potential for a re-rating in both the India and Africa businesses on the back of steady earnings growth. We maintain our Buy rating with target price of Rs 860 per share." 

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