Bharti Airtel remains firmly positioned as a telecom bellwether in the Indian and African markets, backed by strong operational performance and compelling subscriber metrics. Motilal Oswal has reiterated a "Buy" call on the stock, citing consistent average revenue per user (ARPU) growth, 5G monetization tailwinds, and a lean balance sheet. The brokerage has set a target price of Rs 1,360, reflecting a substantial upside from current levels. With Q4FY24 results meeting estimates and a sharp focus on profitability, Bharti Airtel continues to outpace competitors like Reliance Jio and Vodafone Idea in both execution and market discipline.

1. Q4FY24 Results in Line with Expectations

Bharti Airtel reported consolidated revenues of Rs 37,599 crore, marking a 4% quarter-on-quarter (QoQ) increase and a 5% year-on-year (YoY) rise, in line with analyst expectations. This robust topline was underpinned by sequential growth across India mobile and Africa operations.

EBITDA stood at Rs 19,590 crore, with a margin expansion of 10 basis points (bps) QoQ to 52.1%, driven by improved cost efficiencies.

India mobile business EBITDA rose 4.2% QoQ on the back of higher ARPU, while Africa’s EBITDA grew 7.6% in constant currency.

2. ARPU Trend Remains Firm Amid Tariff Rationality

Bharti Airtel continued its upward trajectory in ARPU, clocking in at Rs 209 in Q4FY24 versus Rs 208 in Q3. This marginal rise is critical as it reflects stability even in a non-tariff hike quarter.

Notably, the ARPU for 2G subscribers remains subdued, offering further room for blended ARPU expansion once the company drives mass migration to 4G/5G.

The management’s calibrated pricing strategy continues to pay dividends, helping Bharti Airtel maintain premium positioning without chasing subscriber volume at the expense of margin.

3. Subscriber Growth Momentum Sustained

The India mobile subscriber base grew by 7.4 million QoQ to reach 355 million, highlighting Bharti’s ability to attract quality customers.

The company’s 4G data customer base rose by 7.6 million to 260.5 million. Usage per subscriber increased 6.5% QoQ to 21.6 GB, a healthy signal for monetization.

In Africa, the company added 3.8 million new subscribers, taking the total to 153 million, with consistent data and mobile money user expansion.

4. 5G Rollout Progress and Monetization Strategy

Bharti Airtel has now deployed 5G in over 5,000 cities, with nearly 70 million customers using 5G devices. However, as noted by management, only 13–14% are actively using 5G despite having compatible handsets.

The company plans to launch premium 5G plans to drive monetization in FY25, potentially pushing up ARPU once pricing discipline returns to the sector.

5. Africa: Strong Operating Leverage and Cash Flow

Africa business revenues (in INR) rose 3% QoQ to Rs 9,155 crore, while EBITDA grew 2.5% sequentially. However, in constant currency terms, revenue rose 5.1% and EBITDA climbed 7.6%, showing underlying strength despite FX pressures.

Data revenue and mobile money grew 16.6% and 19.4% YoY respectively, indicating significant headroom for growth.

6. Balance Sheet and Net Debt Position

Bharti Airtel’s consolidated net debt (including leases) stood at Rs 2.21 lakh crore at the end of Q4FY24. The company has reduced net debt ex-lease to Rs 1.17 lakh crore, backed by steady cash flows.

The net debt-to-EBITDA ratio has now improved to 2.3x from 2.5x QoQ, reflecting disciplined capital allocation and deleveraging.

7. Capex Rationalization to Drive FCF

Capex in Q4FY24 came in at Rs 11,400 crore, primarily focused on 5G rollout and fiber expansion. The management emphasized that the peak capex cycle is behind, paving the way for free cash flow (FCF) expansion.

Bharti aims to strike a balance between 5G network deployment and spectrum efficiency, helping moderate future capex intensity.

8. Valuation and Target Price

Motilal Oswal values Bharti Airtel using the SOTP (sum-of-the-parts) method:

9. Strategic Outlook and Investment Triggers

Key catalysts for Bharti Airtel include:

5G monetization through premium tiering

Tariff hike in FY25 post elections

Further ARPU expansion via 2G to 4G migration

Africa’s continued EBITDA growth

Deleveraging and improved FCF outlook

10. Risks to Monitor

Despite bullish projections, investors should watch for:

Delays in tariff hikes or government-mandated pricing freezes

Adverse FX movements impacting Africa margins

Intensified competition from Jio or potential recovery in Vodafone Idea

Conclusion and Recommendation

Motilal Oswal’s reaffirmation of a “Buy” call on Bharti Airtel underscores its robust fundamentals, leadership in execution, and readiness to capitalize on the next phase of telecom evolution. With clear levers for profitability and ARPU improvement, a stable capex cycle, and Africa as a growth hedge, Bharti Airtel offers an attractive opportunity for long-term investors. The target price of Rs 1,360 implies a strong upside, backed by solid operational and strategic footing.