Bharti Airtel deserves to trade at a valuation premium against global peers, says Nomura

Shares of Bharti Airtel Ltd are set for a 28% upside from the previous close, according to global brokerage Nomura. The brokerage has raised its price target to Rs 2355 per share against the earlier target of Rs 2220, an upside of 28%. The brokerage reiterated its bullish stance on Bharti Airtel while maintaining its 'Buy' rating on the telecom stock.

The brokerage's optimism is led by expectations of future tariff hikes, healthy free cash flow generation and the potential for higher shareholder payouts over the next few years.

Nomura sees Bharti Airtel's EBITDA and free cash flow to grow at a compounded annual growth rate (CAGR) of about 14% each between FY26 and FY29.

According to the brokerage, the growth will be supported by an anticipated mobile tariff hike during the third quarter of FY27, continued premiumisation of the subscriber base and operating leverage as revenue growth outpaces cost increases.

The brokerage believes stronger cash generation will improve the company's financial flexibility, enabling it to increase dividend payouts while continuing to invest in future growth opportunities.

Apart from its core wireless business, Nomura highlighted several businesses that could become meaningful long-term value drivers for Bharti Airtel.

These include the company's expanding presence in data centres, Airtel Money, digital lending, cloud services and the value creation potential from its increasing stake in Indus Towers.

The brokerage believes these businesses provide additional growth avenues that are not fully reflected in the current valuation.

Nomura says that Bharti Airtel deserves to trade at a valuation premium compared with global telecom peers, citing four structural strengths.

These include:

• A favourable and relatively consolidated telecom market in India.
• Significant scope for further growth in average revenue per user (ARPU) through future tariff increases.
• Multiple growth opportunities beyond traditional connectivity services.
• A supportive regulatory environment that could help sustain a three-player telecom market over the long term.

ARPU Remains at Healthy Levels

Bharti Airtel's average revenue per user (ARPU) stood at Rs 257 in the March 2026 quarter compared with  Rs 259 in the previous quarter. While ARPU remained largely stable sequentially, Nomura expects future tariff revisions and premium customer additions to drive meaningful improvement over the medium term.

Meanwhile, Bharti Airtel's stock rose nearly 2% to Rs 1876.90 today against the previous close of Rs 1842.10. Market cap of the telco stood at Rs 11.33 lakh crore. Later, the stock ended 0.96% higher at Rs 1859.85. Total 3.59 lakh shares changed hands amounting to a turnover of Rs 67.04 crore on BSE.

The large cap stock has lost 12 per cent this year and fallen 7.44% in a year.