Nomura Remains Bullish on Bharti Airtel, Projects 28% Upside Driven by 10 Key Factors

Nomura has reaffirmed Bharti Airtel as its top telecom pick, increasing the target price to Rs 2,355 per share, which represents a potential upside of nearly 28% based on its previous NSE closing price of Rs 1,841. This robust valuation is underscored by Nomura’s classification of Airtel as an “ARPU compounder”, benefiting from India’s consolidated telecom market structure, which favors only three players. With the rollout of 5G nearing completion and capital expenditure intensity declining, the company is anticipated to generate strong free cash flow, leading into a cycle of deleveraging.

Projected EBITDA and free cash flow compound annual growth rates (CAGR) of 14% between FY26 and FY29 suggest that Airtel is positioned for substantial growth, fueled by expected tariff hikes and market dynamics. Nomura emphasizes that Airtel’s valuation, which is projected to remain above global peers, is justified by India’s favorable market landscape, long-term average revenue per user (ARPU) growth opportunities, and significant adjacent business options such as data centers and Airtel Money.

Nomura’s analysis highlights ten reasons supporting its favorable view, including Airtel’s premium leadership with the highest exit ARPU of Rs 257 for FY26, robust growth in African operations, and a potential IPO for Airtel Money that could crystallize significant value. The anticipated tariff adjustments, which have historically demonstrated a propensity to bolster ARPU growth, are considered critical for maintaining Airtel’s competitive edge in a saturated Indian market emphasizing value over volume.

Despite a fluctuation in share prices, with a 12% decline since the start of 2026, the long-term outlook remains favorable. Airtel’s stock has risen significantly over three to five years, reflecting the market’s confidence in its strategic positioning and operational strengths. With an eye on increasing dividend payouts and minimizing selling overhangs, the future trajectory for Bharti Airtel appears fundamentally sound, reinforcing Nomura’s positive investment recommendation.

Source: The Economic Times

(Expert Note: This report was prepared by the Wealthova team.)