Citi has reiterated its ‘Buy’ rating on Bharti Airtel with a target price of ₹1,980, acknowledging a relatively subdued fourth quarter but maintaining a positive view on the company’s long-term fundamentals, particularly its Africa operations and debt management strategy.
Bharti Airtel reported consolidated revenue of ₹47,876.2 crore in Q4FY25, up 6.1% sequentially, while consolidated EBITDA rose by nearly 9.8% to ₹27,015 crore. The consolidated EBITDA margin also expanded to 56.4% from 54.5% in the previous quarter. However, profit after tax declined 25% QoQ to ₹11,021.8 crore due to exceptional items and tax-related provisions.
India mobile growth slows but no red flags
Citi flagged a deceleration in India mobile business growth, which rose only 1.3% QoQ — a slower pace compared to previous quarters. The brokerage attributed this to seasonality, including two fewer days in the quarter, and to the flat average revenue per user (ARPU), which stayed at ₹245.
Despite the subdued growth, Citi pointed out that the full benefit of the Q3 tariff hikes had already been absorbed. The consistency in ARPU and strong 4G/5G subscriber additions continued to lend stability to the India operations.
Capex and stake hike weigh on net debt
Airtel’s consolidated and India net debt increased by about 4% sequentially. Citi attributed this primarily to a rise in India capex — likely impacted by year-end accounting effects — and cash outgo linked to Airtel’s purchase of an additional 5% stake in its Africa business, taking its holding to 62%.
While net debt went up on paper, Citi expects further clarity from management on capital expenditure plans and future free cash flow deployment. Importantly, the company’s strategic exit from low-margin wholesale businesses in the enterprise segment has had no negative EBITDA impact, according to the note.
Africa operations deliver upside surprise
Citi noted that consolidated revenue was 1.7% ahead of its expectations, largely driven by a better-than-anticipated performance from Airtel Africa. The region continues to be a key growth engine, supported by strong mobile money and data trends.
While management commentary is awaited on further use of free cash flows and AGR dues settlement strategies, Citi remains optimistic about Bharti’s execution across markets and its improving balance sheet fundamentals.
Disclaimer: This article is based on the brokerage report by Citi. It does not constitute investment advice. Investors are advised to consult their financial advisors before making any investment decisions.
