Bharti Airtel Stock Gets 'Buy' Upgrade As ICICI Securities Sees Reasonable Valuation

ICICI Securities Report

Stocks To Buy: We upgrade Bharti Airtel Ltd. to Buy (from Add) as we believe its valuation rerating is supported by solid fundamentals.

Five key parameters, which influence telcos’ valuations, have shown remarkable recovery, and may either sustain or improve further. Therefore, Bharti Airtel’s EV/Ebitda valuation, in our view, may hold with more headroom to increase.

Bharti’s EV/ Ebitda (Ind AS adj.) valuation at 11.3 times FY26E appears to be at significant premium to APAC (excluding China) peers, which are trading at 7.1 times (median); however, Bharti Airtel offers much higher Ebitda CAGR of 14.8% over the next two years versus Asia Pacific peers at just 4.5%.

We prefer to compare telcos as per free cash flow yield, wherein Bharti Airtel at 6.7% (for FY26E) is reasonable compared to 6% for APAC peers.

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