Bharti Airtel Ltd.'s June-quarter earnings reinforced brokerages' positive view on the telecom operator as higher-than-expected mobile subscriber additions and average revenue per user supported growth, while improving margins and free cash flow strengthened the outlook. Jefferies raised its target price, while Macquarie and Citi retained their positive ratings.
Brokerages said the quarter showed continued execution across the India mobile, Airtel Business and Africa operations. Analysts also highlighted operating leverage, market share gains, contained capital expenditure and deleveraging as factors supporting the earnings outlook.
The telecom operator reported sequential growth across profit, revenue and EBITDA during the June quarter, while ARPU increased and operating margin remained broadly stable.
Bharti Airtel Q1 Highlights (Consolidated, QoQ)
- Net profit rose 11.5% sequentially to Rs. 8,167 crore from Rs. 7,325 crore.
- Revenue increased 5.7% to Rs. 58,539 crore from Rs. 55,383 crore.
- EBITDA rose 5.8% to Rs. 33,303 crore from Rs. 31,492 crore.
- EBITDA margin stood at 56.88% versus 56.86% in the previous quarter.
- ARPU increased to Rs. 264 from Rs. 257.
Brokerages highlighted the improvement in subscriber additions and ARPU as key positives from the quarter. Growth in Airtel Business and Africa also supported the consolidated performance, while stronger free cash flow helped the company reduce net debt.
Analysts expect Airtel to benefit from continued revenue growth and operating leverage, with the industry's competitive structure providing visibility on earnings. Jefferies expects EBITDA and EPS to compound at 14% and 28%, respectively, over FY27-FY29.
Here's What Brokerages Are Saying After Bharti Airtel Announced Q1 Results:
Jefferies
- Maintained 'Buy'; Target Price Raised To Rs. 2,360 From Rs. 2,350
- Mobile subscriber additions and ARPU were higher than expected.
- Growth in Airtel Business and Africa exceeded expectations.
- Healthy free cash flow generation was another positive surprise.
- Expects steady growth delivery and a strong earnings outlook.
- Forecasts 14% EBITDA CAGR over FY27-FY29.
- Expects EPS to grow at a 28% CAGR over the same period.
Macquarie
- Maintained 'Outperform'; Target Price At Rs. 2,220
- Said Airtel delivered a strong June quarter.
- Subscriber additions improved, while ARPU was better than expected.
- Further EBITDA margin gains reflected operating leverage as revenue improved.
- Expects the company to continue delivering steady earnings growth.
Citi
- Maintained 'Buy'; Target Price At Rs. 2,190
- Said the June quarter delivered a strong beat driven by operating metrics.
- Net debt declined on contained capital expenditure and strong free cash flow generation.
- Sees a robust growth outlook with high visibility.
- Favourable industry conditions, free cash flow generation and deleveraging support the outlook.
- Strong execution continues to drive market share gains.
- Believes concerns around capital allocation are overdone.
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