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Bharti Infratel Ltd.

BSE: 534816 Sector: Infrastructure
NSE: INFRATEL ISIN Code: INE121J01017
BSE LIVE 15:50 | 22 Sep 389.60 2.25
(0.58%)
OPEN

386.15

HIGH

394.40

LOW

385.45

NSE 15:42 | 22 Sep 390.00 2.35
(0.61%)
OPEN

386.00

HIGH

394.55

LOW

385.20

OPEN 386.15
PREVIOUS CLOSE 387.35
VOLUME 45492
52-Week high 439.00
52-Week low 283.10
P/E 27.44
Mkt Cap.(Rs cr) 72,061
Buy Price 390.00
Buy Qty 370.00
Sell Price 0.00
Sell Qty 0.00
OPEN 386.15
CLOSE 387.35
VOLUME 45492
52-Week high 439.00
52-Week low 283.10
P/E 27.44
Mkt Cap.(Rs cr) 72,061
Buy Price 390.00
Buy Qty 370.00
Sell Price 0.00
Sell Qty 0.00

Bharti Infratel Ltd. (INFRATEL) - Chairman Speech

Company chairman speech

Message from Chairman

Dear Shareholders

The year gone by was a transformational year for the Indian Telecom industry withcontinued growth in subscribers higher adoption of data services aided by spurt insmartphone penetration and deeper coverage of data networks. During the year theGovernment also successfully auctioned spectrum across multiple bands like 1800 21002300 & 2500 MHz and we also saw the launch of services by Reliance Jio that triggeredthe much-awaited industry consolidation. While several operators like Videocon and Telenorexited or merged into other operators; RCom Aircel and MTS announced merger. Anothermajor announcement was the proposed merger between Vodafone and Idea the second and thirdlargest operators.

As far as tower industry is concerned such consolidation especially Voda-Idea mergerwhich may still be some time away if it fructifies will inevitably lead to short term& one-time rationalisation in tenancies. However we believe that the consolidationleading to few but strong and willing participants is good for the tower industry inmedium to long term vis-a-vis large number of small or unwilling operators with nofinancial muscle or passion to invest in data network rollouts. In any event we believeany reduction in revenue on account of the overlaps will be more than offset by the exitcharges as well as the incremental revenue on account of rapid rollouts by all operators.

As anticipated the year 2016-17 witnessed strong network rollouts as evidenced byco-location additions of over 24000 between Infratel and Indus and of 15571 on aproportionate basis which was the highest in the co-last five locations as on March 312017 were at 210606 a co-location factor of 2.32 at closing. With broadband penetrationstill at ~ 20% and Government's push for a digital economy the prospects of mobilebroadband in the country remain strong.

The Company's financial performance during the year was strong with consolidatedrevenues for the year at Rs. 134237 Mn growing by 9% over the last year. ConsolidatedEBITDA improved to Rs. 59420 Mn up 9% Y-o-Y representing an operating margin of 44.3%.The Operating Free Cash Flow grew by 13% Y-o-Y to Rs. 37209 Mn for the year. Theconsolidated profit after tax came at Rs. 27470 Mn up 22% Y-o-Y. The Company declared aninterim dividend of Rs. 12/- per equity share in March 2017 and the Board ofDirectors have also proposed a final dividend of Rs. 4/- per share subject toshareholders' approval. Total cash outgo for the dividend for the full year inclusive oftax on dividend would amount to Rs. 35621 Mn ~132% of the standalone PAT.

Foreign Institutional ownership touched an all-time high of 34.34% as on March 31 2017as compared to 8.65% at the time of IPO in December 2012. This includes 10.3% stake soldby Bharti Airtel to leading global private equity funds - KKR and CPPIB during the year.

Our focus on people development continued to yield results as we were recognised as the‘Best Employer' by AON Hewitt for the third year in a row and also recognised as‘Great Place to Work' for the first time in 2016-17.

We sustained our efforts to improve green footprint during the year and move towardsmore diesel free sites in the long-run. On a consolidated basis over 38900 towers or 43%of our portfolio are green as of March 31 2017.

During the year the consortium led by Bharti Infratel has signed the ConcessionAgreement with Bhopal Smart City Development Co. Ltd. for implementing Smart City project.We are now working towards a successful project delivery. We expect Bhopal Smart City toserve as a model for the Smart Cities initiative and expect other state governments tofollow suit by way of Request for Proposal or RFPs. The project gives us a uniqueopportunity to experiment on several new opportunities becoming available forinfrastructure sharing like optic fiber rollout small cells IBS and Wi-Fi. We hope topursue these opportunities going forward and do more Smart City projects in future. Webelieve that with India now decisively embracing the ‘digital world' the demand fordata would grow exponentially in years to come. This augurs well despite temporarysetbacks for telecom industry & thereby telecom infrastructure industry in long term.

As an undisputed leader in Telecom & Tower Infrastructure space and with a verystrong Balance Sheet we are very well placed to capture what we feel is a significantfor growth in telecom infrastructure which would require large capital.

Akhil Gupta

Chairman