CLSA has maintained its ‘Outperform’ rating on Bharti Airtel with a target price of ₹2,030, citing a robust Q4FY25 performance driven by strong growth in Africa and continued gains in average revenue per user (ARPU). The brokerage has also raised its FY26 and FY27 revenue and EBITDA estimates by 1–2% on the back of improved operating leverage and subscriber momentum.
In Q4FY25, Bharti Airtel’s consolidated revenue climbed 6.1% quarter-on-quarter to ₹47,876.2 crore, while EBITDA jumped 9.8% sequentially to ₹27,015 crore. The company’s EBITDA margin improved to 56.4%, from 54.5% in Q3FY25. Consolidated profit after tax, however, declined 25% QoQ to ₹11,021.8 crore due to exceptional and tax-related charges.
Africa drives surprise; India remains steady
According to CLSA, Bharti’s consolidated revenue and EBITDA were up 6–10% QoQ and 27–39% YoY, beating estimates. A significant portion of the upside came from Africa, where the company continues to benefit from increased mobile data usage and growing mobile money adoption.
In India, the mobile segment posted revenue and EBITDA growth of 1–2% QoQ and 21–30% YoY. ARPU stood at ₹245 — up 17% YoY — and now 19% higher than rival Reliance Jio, showcasing the premium positioning of Airtel’s customer base.
The telecom major also added 6.6 million 4G/5G data subscribers in Q4, taking its annual net additions to 24 million.
Capex in check, FCF remains strong
Bharti Airtel generated a consolidated free cash flow of ₹51,000 crore (US$6 billion) in FY25 after lease payments, against a capex spend of ₹42,300 crore (US$5 billion). The company’s leverage ratio stands at 1.9x, indicating a healthy capital structure amid aggressive network expansion and spectrum investments.
CLSA highlighted the company’s ability to sustain strong free cash flow even while maintaining elevated capex — a positive sign for long-term investors.
Margin leadership and subscriber momentum intact
The brokerage underlined that Bharti’s ARPU leadership and subscriber momentum reinforce its market positioning in both urban and rural pockets. While India mobile revenue growth was modest in Q4, the combination of higher-paying customers and network investments should support revenue accretion going forward.
CLSA also took note of Bharti’s enterprise strategy shift, exit from low-margin businesses, and ongoing digital initiatives, which are all expected to contribute to long-term margin sustainability.
Disclaimer: This article is based on the brokerage report by CLSA. It does not constitute investment advice. Investors are advised to consult their financial advisors before making any investment decisions.
