Synopsis: Telecom stocks may see positive sentiment after Nomura raised the target price, citing tariff hikes, stronger cash flow, premiumization, and multiple long-term growth drivers.
The article outlines the rationale behind the global brokerage’s bullish stance on this company, which is India’s largest integrated communications solutions provider and the second largest mobile operator in Africa.
With a market capitalization of Rs 11,40,114 crore, Bharti Airtel Ltd’s share closed at Rs 1,870 per share, flat from its previous close. The share of this company gave a return of 264 percent over the last five years.
Brokerage’s view
Nomura has reiterated its Buy call on Bharti Airtel and increased its target price to Rs 2,355, indicating a potential upside of around 25.9 percent from the current levels. The brokerage remains optimistic about the company’s growth outlook, expecting strong earnings and steady cash flow to support the stock going forward.
Tariff Hike and Premiumisation Expected to Support Growth
Nomura expects Bharti Airtel to maintain healthy earnings growth over the next few years. It estimates a 14 percent CAGR in both EBITDA and free cash flow between FY26 and FY29. The brokerage believes a likely tariff hike in Q3 FY27, continued migration of users to premium plans, and better operating leverage will be the key drivers behind this growth.
Valuation Gap with Jio Looks Unwarranted
The brokerage believes Bharti Airtel’s current valuation does not fully reflect its business strength. It sees the discount to Reliance Jio as unjustified, given Airtel’s improving profitability, strong free cash flow generation, and consistent execution. Nomura believes these factors provide scope for further upside in the stock over the medium term.
Several New Businesses Could Add Long-Term Value
Apart from its core telecom operations, Nomura sees multiple growth opportunities that could create additional value for shareholders. These include its expanding data centre business, Airtel Money, digital lending, cloud services, and its increasing stake in Indus Towers. The brokerage believes these businesses can support future earnings and reduce dependence on the traditional telecom segment.
Strong Industry Tailwinds Support Premium Valuation
Nomura believes Bharti Airtel’s higher valuation is backed by strong long-term fundamentals. It says the Indian telecom market still has enough room for tariff and ARPU growth, while Airtel’s presence in businesses like data centres, cloud, and digital finance adds to its future potential. A stable three-player market could also support growth over time.
Headquartered in India, Airtel is a global communications solutions provider with over 650 million customers in 15 countries across India and Africa. The company also has a presence in Bangladesh and Sri Lanka through its associate entities. The company is ranked second amongst mobile operators globally, and its networks cover over two billion people.
Financial Highlights: The revenue from operations grew by 16 percent to Rs 55,383 crore in Q4 FY26 from Rs 47,876 crore in Q4 FY25, and EBITDA grew by 17 percent to Rs 31,492 crore in Q4 FY26 from Rs 27,009 crore in Q4 FY25. This was accompanied by a net profit decline of 25.8 percent to Rs 9,247 crore in Q4 FY26 compared to Rs 12,476 crore in Q4 FY25, resulting in an EPS decline of 38 percent Rs 12.02 per share in Q4 FY26 from Rs 19.33 per share in Q4 FY25.
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