Hold Bharti Airtel; target of Rs 1900: ICICI Securities

ICICI Securities recommended hold rating on Bharti Airtel with a target price of Rs 1900 in its research report dated May 15, 2025.

Broker Research

May 21, 2025 / 15:13 IST

Hold

ICICI Securities research report on Bharti Airtel

Bharti Airtel (Bharti) has outlined capital allocation pivot as it is on path to generate strong FCF while management retained flexibility. It anticipates rising dividend payout; however, it still needs to deleverage India balance sheet where net debt to EBITDA is above its threshold, likely increase stake in Airtel Africa, continue to do buyback at Airtel Africa and Indus Towers (where balance sheet is strong), and invest in new growth businesses. Bharti India capex fell 10% in FY25, and company has guided to further reduce capex in FY26 which should boost FCF generation. Bharti’s execution across businesses remains impeccable, and we reckon it grabbing higher market share. It is now shifting focus to drive faster growth in home and enterprise business by expanding distribution and product portfolio.

Outlook

Our EBITDA has been reduced by 4-6% over FY26/27E as we make certain adjustments related to Indus merger, and take slight delay in tariff increase. Our SoTP-based revised TP stands at INR 1,900 (from INR 1,925) with an unchanged India EV/EBITDA multiple of 13x, while we increase multiples for Africa. Downgrade HOLD (from Buy) as it has limited upside to our TP. Nonetheless, we continue to like Bharti due to its strong execution, capital discipline and rising TAM.

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