SingTel

SingTel: shares fall in afternoon trade, hitting a low of $3.33 (-1.5%) as headlines hit showing its 32%-owned India associate Bharti Airtel misses earnings estimates in its Apr-Jun results. Bharti's 1Q consolidated net profit fell 28% on-year to INR12.15b (vs INR15.1b consensus) while revenue rises 39% on-year to INR169.75b, just above expectations, with the profit miss mainly down to high interest costs and 3G investments.
IIFL remains bullish on Bharti's prospects, and its contribution to SingTel's profit; it expects Bharti to record 16.0% FY11-14 revenue CAGR and 22.1% EBITDA CAGR, driven by a turnaround in Africa, increased ARPU from acceleration of India's 3G adoption and an improved regulatory environment. Expects Bharti to drive a 56% increase in SingTel's associates' PBT over the next three years, taking their share to 48% (from 43%) of SingTel's aggregate PBT; says Bharti should deliver around 70% of this PBT growth. IIFL has an Add recommendation on SingTel, $3.32 target.