In his April 13 note, Saifee says that the medium term thesis for Bharti Airtel remains intact. In India, with essentially two strong players, rational competition remains order of the day.
"Mobile spend as a percentage of GDP at 0.8% still among the lower end of Asian emerging market peers, and data consumption among the highest globally—all of which support further monetization over time," he says.
In addition, Jio, which is controlled by a rival conglomerate Reliance, is targeting an IPO at a multiple of 13x EV/Ebitda, which is a 34% premium to what Bharti Airtel now fetches.
Outside India, Singtel's other businesses are largely resilient. In Australia, the market is seeing its own round of mobile price hikes, with market leader Telstra up between 5 to 15% while Singtel's unit Optus managed 5 to 6%.
Such a trend, according to Saifee, reinforces a rational market backdrop and should support monetisation, even as Optus invests more heavily to get its house in order following the recent high profilt outages.
Other Asean associates also remain broadly stable, with Thailand's AIS growing its earnings at 9%.
Here in Singapore, industry consolidation is seemingly delayed, with regulators yet to approve Tuas's acquisition of M1 from Keppel. "We see it as postponed rather than derailed," says Saifee.
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Meanwhile, data centres for Singtel remains a smaller but fast-growing bright spot, with ebitda expected to grow at a CAGR of 29% over FY2025 to FY2028.
According to Saifee, with the recent correction in Bharti Airtel's share price, concerns have emerged over whether Singtel will still partly divest its stake in Bharti to meet its targeted capital management initiatives.
Singtel has in place an asset monetisation whose most regular feature thus far is the regular trimming of its stake in Airtel often at $1 billion a pop.
Saifee reasons that Singtel still has ample buffer from past capital recycling to support payouts.
He notes that Singtel's net debt/EBITDA is just 1.0x and would rise only to 1.3x by FY2028 even after elevated dividends and ongoing buybacks under a $2 billion programme.
Even if Singtel pauses the sale of its stake in Bharti Airtel, Saifee believes that Singtel could then sell its 7.7% stake in Thailand's Gulf Development valued at $2.8 billion, which "looks increasingly
monetisable after the stock’s sharp 42% year to date re-rating."
Singapore Telecommunications shares as at 4.55pm was down 0.41% to trade at $4.86. It is up 6.11% year to date.
