Lots of news flow in the telecom space, as Bharti Airtel Q4 earnings were operationally above expectations. The company has also approved the merger of Indus Towers into Bharti Infratel.

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Talking about the merger, Naveen Kulkarni, Co-Head of Research at PhillipCapital said that the enterprise value is in line with expectations.

“It’s the valuation similar to what Bharti Infratel is. So from valuation perspective the deal seems to be in line with expectation,” he added.

“I do not believe there are huge amount of synergies between the two entities because the three largest cost components for any tower company - rental expense, power and fuel and maintenance - all three expenses are on per tower basis. So there are hardly any synergies with respect to that but there will be some bit of synergies in the overhead expenses, so that can help when the operations get merged,” said Kulkarni.

On stock front, he said as of now we are neutral on Bharti Infratel because we see challenges related to tenancy charges.

First Published:Apr 25, 2018 11:14 AM IST