Bharti Airtel Ltd.'s third-quarter earnings received a positive reaction from analysts as growth in average revenue per user and healthy free cash flow generation improved prospects.
Macquarie maintained an 'Outperform' rating on Bharti Airtel stock with a target price of Rs 1,710, implying a 44% upside over the previous close. It cited solid quarterly performance driven by robust ARPU growth, margin expansion in the domestic mobile segment, and healthy free cash flow generation.
Airtel's ARPU rose to Rs 245 from Rs 233 in the preceding quarter.
The brokerage highlighted that ARPU growth exceeded consensus estimates, bolstering visibility toward achieving a Rs 300 ARPU target by fiscal 2028. Sustained mobile margins underscored the operator's focus on profitability, even as attention shifts to the next round of tariff hikes, a note said.
In a parallel view, Morgan Stanley retained an 'Equal-weight' rating with a target price of Rs 1,650, a 38% potential upside.
It said steady execution and lower-than-expected capex along with a narrower India net debt aided cash flow generation. The quarter was marked by steady subscriber additions, consistent ARPU improvements, and sharp sequential margin gains in the India mobile business, reinforcing a cautiously optimistic outlook for the telecom giant.
The company's net debt declined by Rs 11,000 crore sequentially to Rs 1.33 lakh crore. The burden has declined in the last eight out of nine quarters.
On the other hand, capital expenditure rose to Rs 4,352 crore compared to Rs 3,988 crore in the previous quarter.
HSBC reiterated 'Buy' with an unchanged target of Rs 1,940, a likely upside of 63%. It forecast mobile ARPU to reach Rs 301 by fiscal 2027 and expects deleveraging to improve on the expectation of capex intensity to decline.
Bharti Airtel Q3 Results Snapshot
Bharti Airtel's consolidated net profit, before exceptional items, surged 40% to Rs 5,490 crore during the October–December period compared to Rs 3,593 crore in the previous quarter. Analysts tracked by Bloomberg had a consensus estimate of Rs 5,023 crore.
The company made an exceptional gain amounting to Rs 7,545 crore.
Revenue jumped 8.8% to Rs 45,129.3 crore, beating estimate of Rs 43,955 crore.
Operating margin expanded to 54.5% from 52.7%, also exceeding estimate of 54%.
Subscriber base rose nearly 5% to 35.7 crore.
Shares of Bharti Airtel closed 2.95% lower at Rs 1,191.05 apiece on Thursday, ahead of the results, compared to 0.4% fall in the benchmark Nifty 50.
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