Bharti Airtel shares: Prepaid tariff hike next after postpaid? Buy stock, says MOFSL

MOFSL on Thursday said the risk-reward is attractive for Bharti Airtel Ltd, as it reiterate its 'Buy' rating on the stock with a target price of Rs 2,250 apiece. MOFSL target comes as Bharti Airtel raised its postpaid prices by Rs 50 per month across its postpaid offerings with effect from October 8, with tariffs rising by 3-11 per cent across plans. The new postpaid plans provide free roaming for one international trip per year.

MOFSL said postpaid customers account for 8 per cent of Bharti’s subscriber mix, but likely higher 12 per cent of its wireless revenue mix. On a ballpark basis, the postpaid price hike could drive a 1 per cent uptick in blended ARPU, but with some offset from the free international roaming pack.

MOFSL said past precedents suggest prepaid tariff hike could follow in next six months.

"We note that the rejig in postpaid plans had preceded prepaid tariff hikes by 6-9 months in 2019 and 2021 tariff hike cycles. As Bharti is the market leader in the postpaid segment and RJio does not have a meaningful presence, the company had in the past tweaked postpaid plans to gauge the response from customers/competition before implementing prepaid tariff hikes," MOFSL said.

In May 2019, Bharti had discontinued its entry-level postpaid plan (Rs 299), which was followed by a prepaid tariff hike in November-December 2019. Similarly, in July 2021, Bharti Airtel had restructured its family postpaid plans by removing Rs 749 plan for new customers and increasing the price per add-on SIM on a family postpaid plan by Rs 50.

Further, the company had also raised the prices of its entry-level corporate postpaid plans from Rs 199 to Rs 299. These actions were also followed by a prepaid tariff hike in November-December 2021.

In the June-July 2024 tariff hike cycle, which was led by RJio, both prepaid and postpaid plan prices were revised at the same time.

"Based on the past precedents, we believe these postpaid tariff hikes would also likely be followed by prepaid tariff hikes within the next six months (currently we expect 15 per cent smartphone plans tariff hike in Dec’26). We believe the latest pricing tweaks are a step to boost ARPU in the absence of the broader smartphone tariff hikes and could offset any dilution from the potential launch of voice-only packs in 28/30 days," MOFSL said.

It said the recent pricing rejigs should help Bharti Airtel sustain its outperformance in ARPU growth against peers and sees risk-reward attractive for Bharti.

"We were already building in a price hike of Rs 50 per month in postpaid plans, alongside the 15 per cent prepaid smartphone tariff hike in Dec’26. Hence, an early postpaid tariff hike would not drive meaningful earnings upgrades but would help to offset any ARPU dilution from the potential launch of voice-only packs with a validity of 28-30 days," Bharti said.