Market's view on Airtel Africa
Published on April 2024
- There are concerns over AAF’s financial standing as it earns income in depreciating currencies and pays for infrastructure in hard currencies. There’s uncertainty whether the company can raise rates easily in Nigeria, where its assets have been halved due to equalisation of the black market rate FX and market FX rates.
- Predictions were made that the company’s shares could hit 200p in the next 12 months.
- Indian Continent Investment, a firm linked to Airtel Africa non-executive director Shravin Bharti Mittal, made large share purchases in AAF which were viewed positively by some stock watchers.
- Questions arose about whether the trend of large share purchases and share buy-backs would push AAF’s share price towards £1.20.
- Some stock watchers expressed disappointment at the company’s performance, describing it as a “collapse” and criticising continual selling.
- A potential listing on the money side was noted, with claims that this could significantly increase the company’s value.
- The company’s exposure to Nigeria was questioned, with some stock watchers speculating that this could be causing the company’s ongoing FX losses.
- Despite some negative sentiment, there were stock watchers who viewed AAF as a solid company with high return on capital employed (ROCE) and large predicted profits, making its shares a ‘real bargain’.