Prabhudas Lilladher research has issued an Accumulate Call on telecom major Bharti Airtel, driven by an impressive Q2FY26 performance that surpassed expectations. The telecom giant's consolidated EBITDA soared 35.3% year-over-year to Rs 295 billion, while adjusted PAT jumped 52.7% YoY to Rs 67.9 billion, fueled by strong growth in both India and Africa operations. Key growth drivers included improved India Mobile ARPU, expanding subscriber base, and a surge in Africa revenues. The research house has revised the target price upward to Rs 2,259, based on a 14x FY27E EV/EBITDA for India operations plus strategic value from investments in Airtel Africa, Indus Towers, and Bharti Hexacom. Investors should note steady revenue streams in Home Services and broadband offset by softness in Digital and Enterprise segments.

Strong Earnings Beat

Bharti Airtel's Q2FY26 financials delivered a commanding beat on multiple fronts, with consolidated EBITDA posting Rs 295.6 billion, well ahead of the estimates Rs 268.9 billion and Rs 286.9 billion per Prabhudas Lilladher and Bloomberg consensus respectively. Adj PAT rose sharply to Rs 67.9 billion compared to estimates of Rs 53.8 billion and Rs 67.3 billion, marking a 52.7% year-over-year growth. Revenue growth was propelled by India operations contributing 10.6% YoY increase while Africa’s top line surged 34.6% YoY, collectively underscoring the company’s diversified growth engine.

India Mobile Business Momentum

India Mobile segment remains a cornerstone of Bharti Airtel’s expansion, reporting Rs 281.1 billion revenue—a 13.2% leap YoY—and an EBITDA margin expansion to 60.3%. The average revenue per user (ARPU) climbed to Rs 256, a 9.8% rise year-over-year, supported by disciplined tariff hikes and a healthy net subscriber addition of 1.4 million during the quarter. The subscriber base of 364 million reflects sustained traction, while the postpaid category accounted for 68% of net adds, exemplifying high-value customer acquisition. The rollout of 5G services with 167 million users further underpins revenue and data monetization prospects.

Broadband and Home Services Stability

Home services revenue grew steadily by 30.2% year-over-year to Rs 18.6 billion, buoyed by an expanding customer base and increasing digital consumption trends despite a marginal ARPU decline to Rs 534. Broadband net additions totaled 950,000, demonstrating firm demand for Fixed Wireless Access (FWA) amid rising smart TV adoption. This segment is anticipated to benefit from evolving content habits and is expected to expand further with Airtel’s aggressive investment strategy aiming to capture market share in the estimated 100 million home market opportunity.

Challenges in Digital and Enterprise Segments

The digital services vertical witnessed a subscriber decline of 340,000 attributed to seasonality and structural changes, including a subsidy adjustment on set-top boxes. Enterprise business revenues dropped 6.7% year-over-year but improved 4.3% sequentially due to a strategic focus on quality revenue streams and exit from low-margin contracts. Despite these pressures, Enterprise EBITDA margins remain solid at 41.6%, evidencing operational discipline and gradual recovery in profitability.

Robust Africa Operations

Bharti Airtel’s Africa business posted an exceptional 34.6% revenue growth YoY to Rs 136.8 billion, with EBITDA surging 42.1% to Rs 67 billion. The subscriber base expanded sharply with 4.4 million net adds in the quarter—up from 3.3 million last quarter—while ARPU in USD terms inched higher to $2.5. Management’s increased stake in Indus Towers (up by 5%) reflects confidence in the value of this high-dividend infrastructure asset, critical for the group's overall telecom ecosystem.

Valuation and Target Price

Prabhudas Lilladher reiterates an Accumulate rating on Bharti Airtel, raising the target price to Rs 2,259 from Rs 2,090. The valuation is anchored on a 14x EV/EBITDA multiple for India operations for FY27E and includes a discount-adjusted sum-of-the-parts value from Airtel Africa, Indus Towers, and Bharti Hexacom holdings. With the stock currently trading around Rs 2,113, this implies an upside potential of approximately 7% from current levels, positioning it as a compelling buy for medium-term investors aiming to leverage robust earnings growth and subscriber momentum.

Key Stock Levels and Investment Targets

• Current Market Price (CMP): Rs 2,113
• Immediate Support Level: Rs 2,050 — A crucial pivot based on recent price consolidation
• Strong Support Level: Rs 1,980 — The lower boundary for risk management and stop-loss considerations
• Resistance Level: Rs 2,259 (Target Price) — The price target within 12 months as per PL estimates
• Long-Term Upside Projection: Rs 2,400 — Subject to continued 5G adoption, ARPU growth, and execution of expansion plans

Investors are advised to consider adding Bharti Airtel on any price dips towards key support levels with a view to capitalizing on sustained top-line growth and improving profitability metrics.

Financials Snapshot

Bottomline

Bharti Airtel emerges as a resilient telecom behemoth with fundamentally sound financials and strong operational momentum across geographies. Prabhudas Lilladher's endorsement with an Accumulate rating and an elevated target price reflects the positive earnings visibility underpinned by subscriber base expansion, ARPU improvements, and efficient cost management. Investors seeking exposure to a dominant player in the Indian telecom sector backed by high-growth African operations should seriously consider the stock, especially on any near-term corrective movements towards Rs 2,050-Rs 1,980 support zones.