Morgan Stanley has maintained an ‘Equal-weight’ rating on Bharti Airtel with a target price of ₹1,870, highlighting a strong EBITDA beat in Q4FY25 despite rising capital expenditure. The firm noted that India operations, excluding Indus Towers, performed better than expected and that the company’s financials remain largely resilient, even with pressure on net profit.
Bharti Airtel posted consolidated revenue of ₹47,876.2 crore in Q4FY25, up 6.1% quarter-on-quarter from ₹45,129.3 crore. The increase was led by a 1.3% rise in India mobile revenue and a ~4% uptick in Africa operations. Consolidated EBITDA rose ~9.8% sequentially to ₹27,015 crore, while EBITDA margin expanded to 56.4% from 54.5% in Q3FY25.
However, consolidated PAT declined sharply by 25% to ₹11,021.8 crore, from ₹14,781.2 crore in the previous quarter. This drop was attributed largely to exceptional and tax-related items, rather than operational underperformance.
India business surprises, but capex spikes
Morgan Stanley emphasized that Airtel’s India business, excluding its Indus exposure, posted a notable beat on EBITDA for the March quarter. The performance was driven by a steady mobile segment, with stable ARPU and robust subscriber additions, despite seasonal weakness.
India capex stood at ₹10,400 crore — significantly higher than in Q3 and above Morgan Stanley’s estimates. That said, for FY25 overall, India capex was down 9% YoY, in line with the management’s long-term outlook to moderate investments post-5G rollout phase.
Final dividend doubles, net debt optics mixed
Airtel announced a final dividend of ₹16 per share, representing a 100% year-on-year increase and coming in ahead of expectations. On the balance sheet front, consolidated net debt rose due to the redemption of $1 billion worth of perpetual bonds — which were not counted as reported net debt. Adjusted for this redemption, net debt declined by $186 million, Morgan Stanley observed.
The firm continues to monitor Airtel’s trajectory on monetisation and financial discipline, especially given the elevated capex trends and efforts to optimise capital structures post-debt repayment cycles.
Disclaimer: This article is based on the brokerage report by Morgan Stanley. It does not constitute investment advice. Investors are advised to consult their financial advisors before making any investment decisions.
