- CLSA maintains Outperform rating on Bharti Airtel with a raised target price of Rs 2,320
- Airtel plans to increase Nxtra data centre capacity from 300MW to 1GW with $1 billion investment
- Nxtra will remain majority-owned by Airtel, supporting long-term value and strategic capital inflows
CLSA has reiterated its Outperform rating on Bharti Airtel, while marginally raising its target price to Rs 2,320 from Rs 2,310, implying an upside of roughly 30% from current levels. The brokerage's constructive stance is anchored in Airtel's accelerating investments in its data centre arm, Nxtra, alongside sustained strength in its core India telecom operations.
Airtel is significantly stepping up investments in Nxtra, with total planned capital deployment rising to $1 billion. The company aims to scale up its data centre capacity from 300MW to 1GW over the medium term, positioning itself to capture a meaningful share of India's rapidly expanding data infrastructure market.
CLSA expects this aggressive capacity expansion to be supported by strong structural demand tailwinds, including rising data consumption, enterprise cloud adoption, and increasing localisation requirements. The ramp-up also aligns with hyperscaler demand and AI-led workloads, which are expected to drive sustained growth in high-quality data centre assets.
Strategic Stake Retention
Bharti Airtel will retain a controlling stake in Nxtra post the latest investment round. CLSA views this as a positive, allowing Airtel to consolidate long-term value creation while still bringing in strategic capital to fund expansion.
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The brokerage highlights that Nxtra's growth trajectory remains robust, supported by long-term contracts, a diversified client base spanning enterprises and hyperscalers, and a strong pipeline of capacity additions. This provides visibility on both revenue growth and margin expansion over the next few years.
Core Telecom Business Remains Resilient
Beyond the data centre opportunity, CLSA remains positive on Airtel's core telecom business. The brokerage expects continued tariff hikes, steady subscriber additions, and premiumisation to support average revenue per user (ARPU) growth.
Domestic wireless revenues are likely to remain resilient despite near-term competitive intensity, with Airtel's strong market positioning and focus on high-quality subscribers aiding margin stability. The company's Africa business also continues to deliver healthy growth, adding to overall earnings momentum.
CLSA also factors in Airtel's recent rights issue proceeds and stake sales, which are expected to strengthen the balance sheet and support ongoing capex requirements.
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