Bharti Airtel shares rose nearly 2 percent on June 30 after Nomura reaffirmed its bullish view on the telecom major, raising its target price. The brokerage firm cited expectations of future tariff hikes, robust free cash flow generation and growing shareholder returns.
Nomura maintained its 'Buy' rating on Bharti Airtel stock and raised its target price to Rs 2,355 per share from Rs 2,220, implying an upside of around 28 percent from the previous closing price.
Shares of Bharti Airtel were trading at Rs 1,871.70, up 1.66 percent, in afternoon trade, emerging among top Nifty gainers. The stock has declined about 6.9 percent over the past year, compared with a 6.1 percent decline in the Nifty 50. The company commands a market capitalisation of about Rs 11.4 lakh crore.
Nomura expects Bharti Airtel's EBITDA and free cash flow to grow at a compound annual growth rate (CAGR) of around 14 percent each between FY26 and FY29, driven by an anticipated tariff hike in the third quarter of FY27, operating leverage and continued premiumisation of its subscriber base.
- Share Markets Live Updates | Sensex, Nifty, GIFT Nifty Today
The brokerage said stronger cash generation should support higher dividend payouts over time, while also reinforcing Bharti Airtel's position as a premium telecom play.
Nomura also highlighted several long-term growth opportunities beyond the core mobile business, including data centres, Airtel Money, digital lending, cloud services and the company's increasing stake in Indus Towers.
The brokerage argued that Bharti Airtel deserves to trade at a valuation premium to global telecom peers, citing four structural advantages: India's favourable telecom market structure, significant headroom for average revenue per user (ARPU) growth, multiple growth optionalities beyond connectivity, and potential regulatory support for a three-player industry.
Bharti Airtel's ARPU stood at Rs 257 at the end of the March quarter, compared with Rs 259 in the preceding quarter.
Separately, Bharti Airtel recently received an upgrade in its long-term credit rating from BBB to BBB+ from S&P Global Ratings. The ratings agency cited the company's improving earnings, disciplined capital management and strong market positions in both India and Africa.
S&P expects rising data consumption, continued subscriber additions and steady ARPU growth in India to support earnings expansion over the next one to two years, while the company's strengthening cash flows are expected to help reduce leverage further.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.