Nirmal Bang recommends 'Buy' on Bharti Airtel on strong ARPU, 4G/5G growth

Nirmal Bang Securities has set a target price of ₹2,525 per share for Bharti Airtel, implying a potential upside of 20 per cent from the previous session's closing of ₹2,105.6

Nirmal Bang on Bharti Airtel: Domestic brokerage Nirmal Bang has recommended a 'Buy' rating on Bharti Airtel, India's second largest telecom operator, saying the company remains in a sweet spot amid expected tariff hikes in the industry, remarkable subscriber growth, superior margins and increased 4G/5G conversions. 

 

"We believe the company’s focus on improving the Home/Digital segment, its thrust on investments in data centre would fuel its future growth and drive ROE towards mid twenties in the coming years," the company said in its note. 

 

The brokerage has set a target price of ₹2,525 per share for the stock, implying a potential upside of 20 per cent from the previous session's closing of ₹2,105.6. The stock is currently trading at 9.2 times its estimated EV/EBITDA for FY27.

 

 

At 10:00 AM, the Bharti Airtel stock was trading at ₹2,119, up 0.7 per cent against the previous session's close. In comparison, the benchmark NSE Nifty50 was quoting at 26,161.45 levels, up by 31.85 points.  The company's total market capitalisation stood at ₹1.20 trillion.   READ LATEST STOCK MARKET UPDATES TODAY LIVE

Here's why Nirmal Bang Securities is bullish on Bharti Airtel:

Dominant market share with top industry ARPU: According to analysts, Bharti holds a 34 per cent wireless market share, second only to Reliance Industries’ 41 per cent, supported by extensive 4G/5G rollout and rural expansion. The company leads the industry in average revenue per user (ARPU) at ₹256 in Q2FY26 versus RIL’s ₹211, driven by a diverse customer base, 2G-to-4G/5G migration, and growing use of value-added services. 

 

The company's management expects ARPU to rise to ₹300 with higher data usage, which averaged 28.3 GB/month in Q2FY26, up from 23.9 GB a year ago.

 

Improvement in the Digital/Home segment: Bharti Airtel expects an improvement in the home segment by offering multiple solutions simultaneously, wherein it is targeting existing high-value customers, primarily 50 million customers with strong financial profiles, while aggressively acquiring new ones supported by intense rural penetration and an expanded service portfolio. Expansion into rural areas and a broader service portfolio are likely to boost revenue and strengthen the overall business model.  ALSO READ | Cabinet freezes Vi's AGR dues for 5 yrs; no communication received, says Vi 

Growth through strategic initiatives: According to the brokerage, Bharti expects capital expenditure (capex) to remain stable, focusing on broadband expansion, enterprise solutions, and data centres. Despite the ongoing 5G rollout, no major immediate investments are anticipated, with higher cash flows likely directed toward debt reduction, improving its African operations, and dividend payments.  (Disclaimer: Target price and stock outlook has been suggested by Nirmal Bang Securities. Views expressed are their own.)