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Investing.com - UBS downgraded Bharti Airtel (NSE:BRTI) Ltd (NSE:BHARTI) from Neutral to Sell on Friday, while simultaneously raising its price target to INR1,970.00 from INR1,705.00.
The investment bank cited expectations of a 10% average revenue per user (ARPU) compound annual growth rate over fiscal years 2025-2028, primarily driven by an anticipated 10-12% tariff hike in FY26, with later years mostly supported by secular factors.
UBS cautioned that even the expected FY26 tariff increase faces potential risks of delay or implementation at a lower magnitude than currently anticipated by both the firm and the broader market.
The downgrade comes despite UBS’s recognition of Bharti Airtel’s improving free cash flow generation and strengthening balance sheet, which the firm believes will enable the telecom operator to begin increasing dividend payouts starting in fiscal year 2026.
Despite the projected dividend growth, UBS expects Bharti Airtel’s dividend yields to remain below 3% through fiscal year 2028, contributing to the more cautious stance on the stock.
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