Bharti Airtel Shares Downgraded To 'Reduce' By Dolat Capital Post Q1 Results On Sharp Stock Rally
Following a sharp stock price rise in the last six/12 months, Dolat Capital downgrades to ‘Reduce’ rating from ‘Accumulate’
Bharti Airtel’s Q1 FY26 consolidated rev/Ebitda grew by healthy +18/3% YoY/QoQ and Ebitda by +22/3%; margin 56.9%, +194/-294bps. The QoQ performance is distorted by the provision write-back in Indus.
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Dolat Capital Report
Bharti Airtel Ltd.’s Q1 FY26 results were in-line and healthy. L2L India revenue (excluding Indus) grew by 16.4/2.2% YoY/QoQ and Ebitda by 25.9/2.7% aided by tariff hikes. (Note: Reported performance is not comparable due to consolidation of Indus.)
The company’s solid growth trajectory driven by superior execution, positions it as a healthy compounding story with multiple triggers including-
tariff hike-led ARPU growth in India Wireless (assume another hike in Q3 FY26),
5G monetization,
accelerated growth in Home BB & Enterprise,
deleveraging benefits,
weakening of Vodafone Idea and
listing of Jio.
We broadly maintain estimates for FY26/27E and remain constructive about Bharti’s growth potential.
However, following a sharp stock price rise (19/33% in the last six/12 months), we downgrade to ‘Reduce’ rating from ‘Accumulate’ with target price of Rs 2,000 @ 13x FY27E EV/E for India Wireless (vs Rs 2,030 @ 13x FY27E earlier).
Stake sale by Promoters (or Singtel) and delay in tariff hike are key risks.
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