Bharti Airtel leads Nifty 50 gainers; surges 6% intra-day, nears 18-month high

Shares of Bharti Airtel rose six per cent to hit an intra-day high of Rs 1,648.70 on the BSE during Friday’s trade, marking the sharpest rally in 18 months. The stock's previous notable surge of 8.5 per cent was recorded on May 31, 2023. Despite this jump, it remains below its all-time high of Rs 1,778.95, achieved on September 26, 2024.

S&P revises Airtel's rating outlook to positive

A recent S&P Global Ratings update played a significant role in boosting investor sentiment. The rating agency revised Airtel’s outlook to positive, affirming its 'BBB-' credit rating based on the company’s strengthening earnings and cash flow. S&P projects an 18-20 per cent growth in Airtel’s EBITDA for FY25, driven by recent tariff hikes and strong performance in its mobile segment.

Additionally, Airtel is expected to benefit from lower capital expenditure and robust growth in its broadband and enterprise businesses, S&P noted. The rating agency anticipates further EBITDA growth of 12-15 per cent in FY26, reflecting the full impact of higher tariffs.

Airtel maintains market leadership

Airtel, India’s second-largest telecom operator, boasts an industry-leading average revenue per user (ARPU) in the country’s wireless segment, along with a growing presence in 14 African markets. Analysts remain bullish on the stock, citing its dominant position in the industry and ability to attract quality subscribers.

Analyst views and target prices

Brokerage houses continue to recommend buying Airtel:

• ICICI Securities has set a target price of Rs 1,900, emphasizing Airtel’s premiumization strategy and strong ARPU.

• Axis Securities highlights Airtel’s focus on rural penetration and superior service offerings, reiterating a BUY recommendation.

• Sharekhan predicts a long-term boost to Airtel’s balance sheet through tariff hikes and reduced capital expenditure.

What’s next?

With rising broadband adoption, increased digitalization, and moderated capex, Airtel’s growth trajectory looks promising. However, minor subscriber churn post-tariff hikes may impact short-term metrics, analysts warn.

Investors are watching for further industry-wide tariff hikes and the potential rollout of 5G services, both of which could elevate Airtel’s profitability in the near term.