Indian digital service provider Bharti Airtel's structural growth drivers remain intact, supported by rising mobile ARPU, expanding home broadband subscribers, and increasing free cash flow with lower capex intensity, according to HSBC Global Research. The global research firm has picked five stocks for 2025 among Asian telcos, with Bharti Airtel being one of them. "India telcos are preferred due to better ARPU growth outlook, while Thailand telcos are attractive on rising FCF and dividends," HSBC said in its report dated February 4, 2025.
Also Read: Airtel CEO Says ARPU Drivers Remain Intact Post Tariff Revision
Airtel Among HSBC's Top 5 Asian Telco Picks
HSBC Research's five preferred picks for 2025 (all rated as "Buys") include Bharti Airtel (India), True Corp (Thailand), Singtel (Singapore), Indosat Ooredoo Hutchison (Indonesia), and Globe Telecom (Philippines). "In large-caps, we like Bharti Airtel, True Corp and Singtel. In mid-caps, we prefer Indosat Ooredoo Hutchison (IOH) and Globe Telecom," the report noted.
Bharti Airtel's Growth Drivers Remain Strong
According to the report, Bharti Airtel's consolidated EBITDA is expected to grow at a CAGR of approximately 15 percent, with its EPS rising by around 75 percent over FY24-27E. "Structural growth drivers remain intact for the company: rising mobile ARPU, expanding home broadband subscribers with 5G FWA adoption, and rising FCF (free cash flow) with lower capex intensity," the report said.
The report anticipates a 114 percent year-over-year increase in dividends to Rs 17 per share in FY25E, driven by an improved free cash flow outlook and rising cash flow requirements at the promoter entity.
Also Read: Airtel Expands FWA Coverage in Q2FY25 and Optimises CPE Costs
2025 Market Outlook
Regarding the Indian market, the report expects ARPU growth to remain robust, driven by the residual impact of tariff hikes taken during FY25 (July 2025), another tariff hike in 1Q FY27E, subscriber migration from 2G to 4G, and migration of subscribers to higher bucket data plans due to higher data usage.
Also Read: Airtel Saw No Significant SIM Consolidation or Down-Trading After Tariff Revision
Additionally, the report highlighted that the home broadband segment should see robust growth due to a surge in the adoption of FWA (fixed wireless access) service. "We think Jio and Bharti Airtel are well placed to capture a share of household entertainment spend with their bundled home broadband plans which come with rich content offerings. Capex intensity should decline as 5G coverage capex is past peak levels," the report said.
