Buy Bharti Airtel; target of Rs 2411: Prabhudas Lilladher

Moneycontrol • 2 days ago

Original source

Key Investment Pillars

  • ARPU expansion: Bharti Airtel's India Mobile ARPU stood at Rs271, up 2.7% QoQ, driven by strong momentum across India and Africa operations. The company aims to drive ARPU growth through pricing interventions, customer premiumization, and postpaid conversions.
  • FTTH expansion: Bharti is prioritizing FTTH expansion, while scaling back FWA-led expansion as a structural strategic shift. This shift is expected to improve the company's market penetration and revenue growth.
  • Africa growth: Africa continued to deliver resilient performance, with revenue growing 7.1% QoQ and EBITDA increasing 7.9% QoQ. The company aims to focus on operational efficiency, cost optimization, and cross-business synergies in Africa.
  • Digital business: The digital business remains a drag, with revenue growing 2.4% YoY but remaining flat QoQ. The company is focused on strengthening its infrastructure backbone and sees significant growth opportunities across core connectivity and digital services.

Thesis Validation Checklist

  • ARPU growth: Watch for sustained ARPU expansion through plan upgrades, postpaid conversions, and international roaming.
  • FTTH expansion: Monitor the progress of FTTH expansion and its impact on revenue growth.
  • Africa performance: Track Africa's revenue and EBITDA growth, as well as the company's operational efficiency and cost optimization efforts.
  • Digital business: Observe the digital business's revenue growth and the company's efforts to strengthen its infrastructure backbone. Over the next 12 months, investors should watch for these observable signals to see if the thesis is playing out.