S&P Global upgrades Bharti Airtel to BBB on stronger earnings outlook

The agency cited Airtel's rising ARPU, robust India operations and continued deleveraging for the upgrade, while noting rising debt at Bharti Telecom even as shareholder returns are set to increase

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S&P Global Ratings raised its long-term issuer credit ratings on Bharti Airtel to ‘BBB’ from ‘BBB-’. The ratings agency also raised its ratings on the senior unsecured debt the company issued or guarantees to ‘BBB’ from ‘BBB-’, while the ratings on its subordinated perpetual securities were raised to ‘BB+’ from ‘BB’.

 

“The positive outlook reflects our view that Bharti Airtel's continued deleveraging, and a correspondingly supportive leverage tolerance, could support a higher long-term issuer credit rating over the next 24 months. It also reflects our view that the ratings on Bharti Airtel are not constrained by our sovereign rating on India (BBB/Stable/A-3),” the agency said in a statement Monday. Airtel shared the statement with BSE late evening on Monday.

 

Why did S&P upgrade Bharti Airtel’s rating?

 

The agency based its rationale on the No. 2 carrier’s earnings growth that is expected to remain robust over the next 24 months, fuelled by its Indian operations. It added that more rational competition in India will continue to fortify Bharti Airtel's earnings quality. “We forecast the company's India operations’ reported EBITDA will triple in fiscal 2026, compared with a decade ago.”

 

“The expected growth in the Indian operations stems from our expectations of 2%–4% annual subscriber additions and average revenue per user (ARPU) growth of 6%–8% over the same period, resultant from upgrades to higher-priced plans and higher data consumption,” the agency said.

 

How is Airtel performing in its Indian and African markets?

 

It added that Airtel has increased its ARPU — the money an average customer spends every month, and a key profitability metric — in the mobile segment faster through the industry-wide tariff hikes in July 2024. At that time, Bharti Airtel raised prices on its mobile plans by 10%–21%. Its ARPU reached Rs 256 in the second quarter of fiscal 2026, up 21% from the quarter ended June 30, 2024.

 

It has also gained wireless subscribers alongside the largest telco, Reliance Jio, partly benefiting from churn from No. 3 Vodafone Idea, largely due to underinvestment in its network, leading to 364 million wireless customers as of September 2025, up from 351 million a year ago. Earnings from the African business are expected to be in line with Indian business earnings.

 

“Airtel Africa PLC's operating performance should remain strong, with 8%–10% annual growth in customer base and ARPU (in constant currency terms) over the past three years,” it said.

 

What risks and outlook did S&P highlight?

 

The agency expects Airtel to increase its shareholder returns in tandem with rising earnings, forecasting dividends to rise to about Rs 12,000 crore in FY26, and doubling to about Rs 24,000 crore in FY27.

 

However, it flagged rising debt at Bharti Telecom, parent of Bharti Airtel, which rose to Rs 40,000 crore as of September 30, 2025 — more than 15% of Bharti Airtel's adjusted debt on the same date, and much higher than the Rs 1,000–2,000 crore in FY21 and FY22.