Bharti Airtel best-placed to benefit from rising ARPUs, say analysts; here are stock price targets

Bharti Airtel Ltd reported healthy set of Q2 numbers and is seen best-placed among telecom operators to benefit from tariff hike-led improvement in average revenue per users (ARPUs). The tariff hikes should further strengthen the telecom operator's balance sheet and cash flow profile, analysts said.

Nomura India reiterated its 'Buy' rating on the stock and lifted its target price to Rs 1,850. The foreign brokerage sees FY25 ARPU at Rs 238, up 16 per cent YoY and raised its FY26/27 ARPU estimates by 3 per cent and 6 per cent to Rs 269 and Rs 304, respectively, factoring in 13 per cent growth.

"We believe Bharti Airtel will continue to benefit from its higher-quality subscribers vs peers, and be able to leverage its significant digital and enterprise initiatives in a 5G landscape, which will enable its transition from a telco to a techco in the coming years," it said.

Bharti Airtel FY26 Ebitda has 4 per cent sensitivity to every Rs 10 change in ARPU, it said.

MOFSL said it continues to like Bharti Airtel's superior execution on the premiumisation agenda. With moderation in capex intensity, Bharti Airtel is likely to generate significant free cash flows, which should lead to significant deleveraging and improvement in shareholder returns, it said.

"We reiterate Buy on Bharti Airtel with target price of Rs 1,900. We value India wireless and homes business on DCF (implies 13 times FY27 EV/Ebitda), DTH/Enterprise at 6 times/10 times December 2026 Ebitda and Bharti's stake in Indus Towers and Airtel Africa at a 25 per cent discount to our target price/CMP," MOFSL said.

Nuvama said Bharti Airtel is in an enviable position today, generating over Rs 10,000 crore of quarterly FCF, which should further improve with peak 5G capex behind.

The tariff hikes will further strengthen its balance sheet and cash flow profile, it said.

"We are continuing to value the stock using SotP, valuing all businesses on Sep-26 estimates: India mobility business at 13 times (earlier 12 times), other businesses at 7 times Sep-26E EV/Ebitda, and Tower/Africa business at a 20 per cent discount to current market cap; retain ‘BUY/SO’," the brokerage added.