Bharti Airtel has witnessed substantial growth in its data subscriber base and market share. The company continues to experience robust additions of 4G/5G subscribers, and it foresees further expansion in both data subscribers and post-paid customers. According to CLSA's report dated September 7th, this growth is expected to enhance Bharti Airtel's Average Revenue Per User (ARPU) and strengthen its overall market position.
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Robust Data Subscriber Additions
Bharti Airtel continues to add 4G/5G subscribers at a strong pace, with 24.5 million additions in the last 12 months. According to the report, CLSA forecasts Airtel to achieve annual upgrades of 20 million by FY26CL and data subscribers reaching 293 million, leading to a significant increase in ARPU. CLSA estimates that this increase in data subscriber additions will contribute to increase in Airtel's ARPU from Rs 200 to Rs 257 by FY26CL.
Acceleration in Postpaid Subscribers
CLSA also highligted that Bharti Airtel is experiencing an uptick in post-paid subscriber additions, with 0.83 million in 1QFY24 alone, marking a 3.4x YoY growth. This growth extends to 4.8 million when considering IoT/M2M subscriptions. Post-paid subscribers, known for their higher ARPU, are contributing to revenue growth.
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Market Share Gains
Bharti has been gaining revenue market share, with a 60 basis point increase to 36.7 percent in 1QFY24 and 5 percentage point gains over three years. These gains are notable in B and C circles, complementing the company's strong presence in metros and A circles.
Positive Outlook
According to the report, Bharti Airtel's positive trajectory includes rising ARPU, increasing data subscriber penetration, and further market share gains. Projections indicate a 13/17 percent India mobile revenue/Ebitda Compound Annual Growth Rate (Cagr) by FY26CL.
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Despite a 16 percent market cap increase in 12 months, Bharti's stock offers an attractive risk-reward profile with strong growth ahead, said the report.
The CLSA report highlighted various metrics of Airtel's performance, including the current postpaid plans offered by Bharti Airtel. CLSA stated that even if tariff hikes are delayed beyond FY26, Bharti Airtel, with an additional 50 million subscribers, would still meet CLSA's forecasts. Therefore, CLSA has maintained a "BUY" rating for Airtel, with an SOTP-based target of Rs 1,100.
