Our assessment is based on higher tenancies as telcos continue to expand voice/data network. We increase our tenancy assumptions to 13,000 tenants, on average, over FY15-17f versus 10,500 previously which drives our revenue/ebitda/ NPAT up 1-12%. This also captures R-Jio's expansion plans to rollout coverage to 5,000 towns/ cities and over 6 lakh villages over the next few years.
Recent cancellation of 3G-ICR bans will need more coverage/capacity too. Overall, the cashflows are good. We estimate a 25% CAGR to Rs 3,200 crore by FY17f. Balance sheet is strong, and at a macro level, market sentiment towards infrastructure is more resilient versus operators we think and Bharti Infratel is well positioned here. We do note, however, that following the recent strong share rally, incremental increases may be more gradual, especially as H1 is seasonally slow.
Towercos are a rising focus in Asia. We expect more buzz – M&A and IPOs – from this industry.