Bharti Airtel reported a robust subscriber growth of 67% in FY08 and the momentum has continued in Q1FY09.
Incremental monthly wireless additions have improved from about 2 million in November 2007 to 2.7 million in August 2008. We expect the pace of subscriber additions to continue and peg FY10E mobile base at 103 million.
Although we have assumed ARPU declines in FY09 and FY10 to factor in the impact of intensifying competition, we expect the company to maintain its impressive lead over rivals. On the above mentioned rationale we recommend a BUY with a price target of Rs840.