Airtel Africa Q2 Review — Strong Double-Digit Growth Across Verticals; Value Add For Bharti Says Motilal Oswal

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Motilal Oswal Report

Airtel Africa constant currency revenue at $1.5 billion continued to grow in healthy double digits (+24% YoY, vs 25% YoY in 1Q), driven by sustained double-digit revenue growth across data (+36% YoY), Mobile Money (+30% YoY), and voice (+13% YoY).

Airtel Africa’s reported revenue came in at $1.57 billion (+11% QoQ), ~4% ahead of our estimate, driven by favorable forex movement and better performance in East Africa (6% beat) and Francophone Africa (3% beat). 

Airtel Africa’s CC Ebitda at $733 million also continued its double-digit growth (+31% YoY vs. 33% YoY in 1Q). Reported Ebitda at $760 million (+13% QoQ, +36% YoY) came in ~7% ahead of our estimate.

Reported Ebitda margin expanded ~90bp QoQ to 48.5% (+240bp YoY) and was 110bp above our estimate, driven by margin expansions in Nigeria and East Africa.

Despite ~17% YoY rise in capex to $197 million, 2QFY26 CC operating FCF rose 37% YoY to $536 million (H1 FY26 operating FCF up ~45% YoY to $1.09 billion).

Net debt was stable QoQ at $5.5 billion. Excluding leases, net debt declined to $1.63 billion (vs $1.72 billion QoQ). Reported leverage stood at 2.1x (vs 2.2x QoQ). Excluding leases, net debt to Ebitdal stood at ~0.8x (vs 0.9x QoQ).

Airtel Africa declared a dividend of 2.84 cents/share, a 9.2% increase in line with the company’s progressive dividend policy.

The company has raised its capex guidance to $875-900 million (from ~$750 million earlier), noting the immense growth opportunities in its markets.

Airtel Africa’s continued strong performance has led to more than a 2.3x jump in its share price in CY25, and yet it trades at ~5.3x Sep’27E EV/Ebitda, with further room for value unlocking with the impending Mobile Money IPO in H1 CY26.

Given a long runway, we expect Airtel Africa to sustain its double-digit growth, which should lead to further re-rating, which would be beneficial for Bharti Airtel’s shareholders (~Rs 84/share contribution from Airtel Africa in our Bharti’s SoTP-based target price of Rs 2,285).

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