Shares of Bharti Airtel, one of India’s top telecommunications service providers, have been maintaining strong upward momentum on Dalal Street, consistently hitting new lifetime highs and crossing significant milestones, which have resulted in stellar returns for its investors.

In today’s session, the stock touched a fresh all time high of ₹1,675 apiece, resulting in a 62 per cent gain in the current year so far. This remarkable rise has not only boosted investor sentiment but has also significantly increased the company’s market capitalization, bringing it closer to the ₹10 lakh crore mark, a feat achieved by only a handful of companies in India.

Taking the stock’s today’s all time high price into account, Bharti Airtel’s market capitalization stands at an impressive ₹9.7 lakh crore. This sharp rise in value represents an increase of ₹3.66 lakh crore over the past nine months alone. Over the past seven months, the stock has consistently trended upward, posting gains in each of the last six months. So far this month, it has risen by an additional 6 per cent.

Such a strong performance highlights the growing confidence in the company’s business prospects, underpinned by its strong player in the telecom sector, rapid expansion in 5G services, and strategic investments in digital and network infrastructure.

Currently, only three listed companies in India have market capitalization exceeding ₹10 lakh crore, making this a significant milestone. Should Bharti Airtel’s shares continue to rise at the current pace, the company is well on track to join this elite group of companies, potentially becoming the fourth member of the ₹10 lakh crore club in the near future.

This year marks the sixth consecutive year of positive performance for the stock. Looking at the broader picture, the stock has delivered consistent returns over the past five years. In calendar years 2019, 2020, and 2021, it gained 59 per cent, 12 per cent, and 18 per cent, respectively.

This upward trend continued in 2022 and 2023, with the stock rising by another 18 per cent and 28 per cent. Altogether, these gains have resulted in an impressive 267 per cent surge over this period.

Looking at the recent developments, Airtel Business, the B2B arm of Bharti Airtel, signed an agreement with Sparkle, a leading global operator from Italy to secure additional capacity on the Blue-Raman submarine cable systems.

This partnership will connect India to Italy, enhancing Airtel’s global network diversification and improving low-latency routes between Asia and Europe. The additional capacity will support the growing demand for data services in India and neighboring regions.

Both companies will also collaborate on new business opportunities and projects in the Indian subcontinent, leveraging their cable infrastructures for future developments, as per the company’s exchange filing. 

Industry-leading ARPU

The company achieved record-high revenue market share in FY24 as it surpassed 350 million mobile customers and 250 million data users, with a notable 28.6 million new smartphone users added, driven by its rural expansion efforts.

Airtel also increased its ARPU to an industry-leading ₹209, which further jumped to ₹211 in the first quarter of the current financial year. In broadband, Airtel gained 1.6 million customers, while in DTH, it was the only operator to grow its customer base.

Airtel Business saw double-digit growth, and Airtel Africa’s mobile and mobile money user bases expanded by 9 per cent and 20.7 per cent in FY24, respectively.

As of March 31, 2024, India’s total telecom user base reached 1,199.28 million. Bharti Airtel’s customer base stood at 352.3 million, with network minutes increasing by 7.3 per cent to 4,667 billion.

The company had 260.8 million data customers, including 252.7 million 4G and 5G users. Airtel’s focus on bundled plans with substantial data allowances led to a 21.8 per cent rise in total data usage, amounting to 65,978 billion MBs on the network.

Analysts see more peaks ahead

Both domestic and global brokerage firms have expressed optimism about Bharti Airtel’s future prospects, citing factors such as tariff hikes, the 2G to 4G upgrade cycle, strong growth in its enterprise and fiber-to-the-home (FTTH) businesses, and reduced capital expenditures following the 5G rollout over the next three years. 

Global brokerage Jefferies recently reiterated its “buy” recommendation for Bharti Airtel, raising its target price from ₹1,760 to ₹1,970 per share. Jefferies has also increased its revenue and EBITDA estimates for Bharti’s India operations by 5-9 per cent for FY26 and FY27, projecting a robust 19 per cent EBITDA CAGR for the FY24-27 period. It expects a 10 per cent tariff hike in mid-FY26 and another in Q2FY27.

With capital expenditures expected to decline in the coming years, Bharti Airtel is forecasted to achieve a 23 per cent CAGR in free cash flow to equity (FCFE), which could further boost the stock’s performance, it said. 

Similarly, Goldman Sachs also raised its target price for Bharti Airtel from ₹900 to ₹1,700 while maintaining a “buy” rating. It highlighted strong growth prospects and improvements in free cash flow and return profiles as key drivers for the stock’s premium valuation.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.