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On Wednesday, JPMorgan reaffirmed its Overweight rating and price target of INR1,970.00 on shares of Bharti Airtel (NSE:BRTI) Ltd (BHARTI:IN). The telecom giant’s fourth-quarter performance matched expectations in several key areas, including net subscriber additions, average revenue per user (ARPU), and EBITDA margins. The company’s report revealed a substantial rise in capital expenditure in India, which was unexpected, particularly in the Enterprise, Wireless, and Homes sectors, with a 56% quarter-over-quarter and 49% year-over-year increase.
Bharti Airtel’s India wireless revenues saw a modest 1% growth from the previous quarter, driven by an increase in subscribers, which added 5 million new users compared to JPMorgan’s estimate of 4.5 million. The ARPU remained steady at Rs 245, slightly below the expected Rs 246, attributed to seasonal trends. The company’s EBITDA margin improved by 0.3% from the previous quarter to 59%, slightly surpassing JPMorgan’s forecast.
The company’s capital expenditures in India’s wireless sector and overall investments surged by 39% and 52% quarter-over-quarter, respectively, reaching Rs 60 billion for the wireless sector and Rs 104 billion in total. This considerable increase in spending outpaced JPMorgan’s predictions of Rs 47 billion for the wireless sector and Rs 89 billion overall. The full-year capex, excluding towers, reached Rs 302 billion, which is below the previous fiscal year’s total.
The Home segment of Bharti Airtel’s business experienced a notable uptick in new subscribers, approximately 800,000, with fixed wireless access (FWA) likely accounting for over half of this growth. However, the company’s DTH and Airtel Business divisions did not perform as strongly. The most significant revelation was the elevated capital expenditure in the Enterprise segment, which increased by nearly 2.7 times from the previous quarter. This substantial investment could indicate the direction for the company’s spending in the fiscal year 2026 if this level of expenditure continues.
In addition to these operational results, Bharti Airtel announced a better-than-expected dividend of Rs 16 per share, which represents a 50% payout ratio, despite not receiving any contributions from Indus Towers. This move underscores the company’s commitment to delivering value to shareholders amidst its aggressive investment strategy.
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