Bharti Airtel shares rally 3%, near record high on strong earnings hopes

Driven by tariff repair in the India wireless segment, Airtel's free cash flow generation improved significantly over the past few years.

Shares of Bharti Airtel (Airtel) hit a six-month high of ₹1,767.05, gaining 3 per cent on the BSE in Friday’s intra-day trade on hopes of strong earnings for March 2025 quarter (Q3FY25). In three trading days, the stock price of the telecom services provider has gained 5 per cent. Since March, it has rallied 13 per cent. The stock is quoting close to its record high level of ₹1,779 touched on September 26, 2024.

 

Thus far in the calendar year 2025, Airtel has outperformed the market by surging 10.5 per cent, as compared to 4.3 per cent decline in the BSE Sensex.

 

 

Airtel is a global communications solutions provider with over 550 million customers in 15 countries across India and Africa. The company also has its presence in Bangladesh and Sri Lanka through its associate entities. The company ranks amongst the top three mobile operators globally and its networks cover over two billion people. Airtel is India’s largest integrated communications solutions provider and the second largest mobile operator in Africa.

 

On March 11, 2025, Airtel announced an agreement with SpaceX to bring Starlink’s high-speed internet services to its customers in India. This is the first agreement to be signed in India, which is subject to SpaceX receiving its own authorisations to provide Starlink services in India, the company said in an exchange filing. 

 

It enables Airtel and SpaceX to further explore how Starlink can complement and expand Airtel’s offerings, and how Airtel’s expertise in the Indian market complements SpaceX’s direct offerings to consumers and businesses.

 

Driven by tariff repair in the India wireless segment, Airtel’s free cash flow (FCF) generation improved significantly over the past few years (9MFY25: ₹29,200 crore). Airtel’s main priority for cash deployment so far has been prepaying high-cost debt.

 

With a complete flow-through of tariff hikes and a moderation in capex intensity, Airtel is likely to generate significant FCF (~₹1.3 trillion over FY25-27E). With high-cost debt largely repaid and leverage under control, analysts at Motilal Oswal Financial Services believe capital allocation remains the key monitorable and would likely be the biggest driver for Airtel’s stock price performance over the medium term.

 

Meanwhile, CLSA sees long-term growth opportunity in Airtel reaffirming it’s ‘outperform’ rating on the stock due to strong growth focus and capital expenditures (Capex). Airtel's biggest non-mobile business is enterprise data services, and its portfolio includes global and domestic segments along with data centres, the brokerage said in a report on March 26.  

 

The data centre business is growing steadily, and the domestic segment is seeing "strong" growth in digital alongside growth in connectivity services. Airtel’s Business is renewing focus on digital services of cloud, security, internet of things and communications platform as a service, accounting for 90 per cent of industry growth, the brokerage firm said.

 

Meanwhile, JM Financial Institutional Securities said  Airtel is expected to report strong mobile broadband (MBB) subs addition, at 6mn in Q4FY25 (vs. 6.5mn in Q3FY25); overall subs addition is also expected to be healthy at 3mn subs. 

 

However, its ARPU is expected to be flat QoQ at ₹245, as the benefit of upgrades and improved subs mix is likely to be offset by 2 lesser days QoQ in Q4FY25 (while Jul'24 tariff hike has completely passed through its average revenue per user (APRU) by end Q3FY25). Hence, the brokerage firm said they built in 1 per cent QoQ growth in India wireless business revenue to ₹26,500 crore, and 1.4 per cent QoQ rise in EBITDA to ₹15,700 crore. However, the enterprise business is expected to post EBITDA growth of only 2.1 per cent QoQ, while Fiber to the Home (FTTH) is likely to witness healthy subs gains (~590k subs addition QoQ), JM Financial Institutional Securities said in telecom Q4FY25 preview.