Bharti Infratel

Bharti Infratel reported annual revenues of Rs.14,647 crs. up by 0.4% y-o-y, EBITDA of Rs. 7,442 cr and a PAT of Rs. 3,299 crs. for the period FY19-20. However, after adjusting for the accounting impacts due to IndAS 116, the EBITDA decreased ~2% y-o-y basis in FY20 compared to whole year FY19. The company also declared its 3rd interim dividend of Rs. 4.10 / share taking the cumulative dividend to Rs. 10.50 / share in FY20. The company payed a hefty dividend of Rs. 10.5/share in FY20 implying a dividend yield of ~7%. However, the growth outlook looks tepid due to ongoing consolidation among telecom operators. The fate of Bharti Infratel is dependent on the co-existence of all the 3 telecom operators namely Bharti Airtel, Vodafone Idea & Reliance JIO. We assign a neutral rating to the stock and await any further development in the telecom operators financial condition before turning constructive.