Bharti Airtel Best Placed To Benefit From Rising Mobile ARPUs, Nomura Says; Lifts TP

Global brokerage Nomura said Bharti Airtel Ltd. is best placed to benefit from rising mobile average revenue per user (ARPU) and raised the Indian telecom operator’s target price to 1,550 rupees from 1,305 rupees per share.

The brokerage also reiterated Buy rating on Bharti Airtel, which closed at 1,309.90 rupees on the National Stock Exchange yesterday.

Nomura said the company’s 4QFY24 results were in line with its estimates, reflecting sustained healthy sequential growth across India businesses, which was offset by Africa business on account of sharp currency devaluation.

India wireless performance remained robust, reflecting net subscriber additions of 6.7 million (a 12-quarter high) to 352.3 million and ARPU of 209 rupees (up 3% quarter-on-quarter), Nomura said.

The brokerage maintained its FY25 ARPU growth estimate of 15% year-on-year to 244 rupees.

Nomura said the outlook for Bharti Airtel remains robust, underpinned by:

• Imminent tariff hikes for the India wireless business (post general elections)

• Sustained strong delivery across key segments of enterprise and homes

• Robust consolidated EBITDA growth of 20% CAGR over FY25-FY26F despite the impact from the Africa business

• Net debt having peaked out, given completion of the 5G rollout declining capital expenditure levels and robust operating cash flows

• Improvement in return ratios

“We believe Bharti will continue to benefit from its higher-quality subscriber base versus peers and be able to leverage its significant digital and enterprise initiatives in a 5G landscape, which will enable its transition from a telco to a tech company in the coming years,” research analyst Hemang Khanna said in the investor note.

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