SingTel

SingTel/ Bharti: StanChart tips the bottom for Bharti's prolonged decline in returns, led by fundamental improvements across segments. Further upside is possible from faster data growth and turnaround in Africa, besides the potential to monetise or hive off some of its other businesses. Relatively, Bharti is much better placed in terms of sufficiency of data spectrum and hence carries a lower risk of dilution of its return of capital employed (RoCE) trajectory vs. its peers. House believe that Bharti’s Africa assets are under-utilised and there is scope for significant improvement. The gradual rise should continue as management’s current focus is on improving the utilisation of African assets rather than investing in capacity/coverage expansion. SingTel recently raised its stake in the associate to 32.34%, in a bid to focus on maximizing the value of its existing businesses. Latest broker ratings on Bharti Airtel: StanChart has an OUTPERFORM with INR404 TP, translating to a 17% upside from its current price. CLSA has an UNDERPERFORM with INR315 TP.