Indian telecommunications company Bharti Airtel has entered India's USD 100 billion market cap club, driven by its mobile business, CLSA said in a report. With this India now has four companies with a market cap of over USD 100 billion. Bharti's strong India mobile growth, backed by management execution, is driving this mega corporation with 562 million subscribers (406 million in India) across 16 countries, CLSA said.
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Key Drivers of Bharti Airtel’s Growth
The report highlighted that high-growth scalable business, strong management, and a global competitive edge are Bharti Airtel's three key drivers. India, being the world's second-largest mobile market by subscriber base, has seen 83 percent mobile penetration. Bharti has benefited from this growth and is a strong number two operator.
Bharti Airtel's Market Position and ARPU Advantage
Specifically, the report highlighted the ARPU (Average Revenue Per User), which is at a 15 percent premium to Reliance Jio. Additionally, the Brand Airtel is among the most familiar in India, while the management has been at the forefront of innovation in execution and marketing, delivering results in an intensely competitive environment.
CLSA believes that Airtel, with around 352 million mobile subscribers in India, driven by strong management, will capitalise on new opportunities in cloud, data centers/enterprise services, 5G fixed wireless access (FWA) homes, and generate superior returns.
Additionally, the report noted that the risk of competition from RJio is behind it, and Bharti is at the forefront of mobile growth and new opportunities. CLSA has a Buy call rating and a target price of Rs 1,540 for Bharti Airtel, which, driven by tariff hikes, rising mobile data penetration, and 5G subscribers, will continue to see strong growth.
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Airtel Network Penetration
Also, Airtel is reportedly focused on ramping up data from 70 percent penetration of its 342 million India mobile subscribers and rolling out 5G services targeting all of urban India and key rural areas.
"Bharti's 5G mobile roll-outs targeting top-end subscribers, enterprise, home broadband/5G FWA, and convergence services ramp-up will further enhance growth," the CLSA report said.
Considering all aspects and growth, the report said revenue jumped from Rs 8 billion in FY01 to Rs 956 billion in FY17 and now Rs 1,500 billion (USD 18 billion). It should reach Rs 1,922 billion (USD 23 billion) in FY27 CL.
