Morgan Stanley has upgraded Bharti Airtel to Overweight and raised its price target to Rs 2,435, citing improving industry fundamentals, stronger monetisation, and sustained growth visibility.
The brokerage expects Airtel’s average revenue per user (ARPU) to rise to Rs 370–Rs 390 by FY32, even without any additional tariff hikes beyond FY27. According to the report, ARPU expansion will be driven by better monetisation of data consumption, a gradual mix shift from prepaid to postpaid subscribers, and higher contribution from value-added services such as international roaming.
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Morgan Stanley has also advanced its expectation of the next tariff hike to FY27, from its earlier estimates, and now sees a 16–20% increase in tariffs across 4G and 5G plans. The firm noted that recent changes in tariff structures across the sector indicate a stronger focus on monetisation rather than subscriber growth.
Historically, Bharti Airtel has emerged as a disproportionate beneficiary of tariff hikes, delivering higher gains in revenue and EBITDA compared with peers during previous price increases. Morgan Stanley believes this trend is likely to continue, supported by Airtel’s stronger network position and improving subscriber mix.
The report added, "We think Bharti Airtel has potential to deliver ARPU of Rs 400 over the next five years even without any further tariff hike beyond 2026. We believe any further tariff hikes could drive upside risks to ARPUs,"
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The brokerage added that Airtel’s improving return ratios and declining capital intensity place the company in a favourable position as the Indian telecom sector moves deeper into a monetisation-led growth phase.
