Bharti Airtel shares at Rs 1,100? CLSA sees rise in APRU, market share gains ahead

CLSA in its latest note maintained positive view on Bharti Airtel, forecasting strong subscriber additions in 4G/5G segment, market share gains and further improvement in average revenue per user (ARPU) due to rising post-paid subscribers. The foreign brokerage said acceleration in post-paid subscriber additions may contribute another 7-10 per cent rise in ARPU for Bharti Airtel. Besides, 4G and 5G subscriber additions remained strong at 2.45 crore in the last 12 months and CLSA anticipates 2 crore in annual 4G/5G upgrades by FY26, which, it says, may contribute to 30 per cent jump in ARPU to Rs 257 by FY26 from Rs 200 at present.

"Bharti’s market cap is up 16 per cent in 12 months and we see strong growth ahead with rising ARPU, data penetration and market share gains and forecast 13/17 per cent India mobile revenue/Ebitda CAGR to FY26CL. At 8 times forward EV/ Ebitda, the stock is trading at 5-year average multiples; retain Buy with SOTP based target of Rs 1,100," the foreign brokerage said.

Market share gains

In the June quarter, Bharti Airtel's revenue market-share stood at 36.7 per cent. CLSA said Bharti Airtel's revenue market-share is up five percentage points in three years. It said Bharti Airtel's latest share gains have been led by B and C circles while it leads in metros and A circles/market.

"Our forecast of Rs257 ARPU by FY26 implies 20 per cent cumulative tariff hike and 2 per cent share gain to 38 per cent by FY26CL. If tariff hikes are delayed beyond FY26, Bharti with 50m additional subscriber addition may still reach our forecast," CLSA said.

Post-paid subscribers

CLSA said Bharti Airtel is seeing acceleration in post-paid subscribers. The count stood at 2.05 crore in mobile (4.04 crore including IoT/M2M) of Bharti Airtel's 23 crore 4G/5G subscribers and 33.90 crore total subscribers.

"Post-paid are top end with ARPU over 200 per cent premium to blended ARPU. Bharti post-paid tariffs are 170 per cent higher vs prepaid hence it too bolsters ARPU. Assuming 1 crore of subscriber additions are post-paid by FY26CL these can contribute another 7-10 per cent rise in Bharti ARPU to Rs 257 by FY26CL. Bharti’s post-paid acceleration is despite tariff being 20 per cent higher vs RJio," it said.

Data subscribers

Meanwhile, CLSA said Bharti Airtel’s 4G/5G subscriber net additions remain strong at 56 lakh in June quarter and 2.45 crore in the last 12 months. Bharti currently has 23 crore 4G/5G subscribers, which is 70 per cent penetration of own 33.90 crore total mobile subscribers.

"We forecast steady growth for Bharti from here at two crore annual upgrades by FY26CL and data subscribers reaching 29.3 crore, an 81 per cent penetration of 35.90 crore total mobile subscribers. We estimate data subscriber additions to contribute 30 per cent rise in Bharti’s ARPU from Rs 200 to Rs257 by FY26CL," it said.

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