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Arpu gains set to support Bharti Airtel's valuation
Business Standard
|December 17, 2025
Lower capex, customer upgrade among major drivers
The stock of telecom major Bharti Airtel was up 1.6 per cent on Tuesday, taking its overall gains for the past year to 26.4 per cent. The stock was the top gainer in benchmark indices. The gains are on expectations that tariff hikes, premiumisation, and peaking out of capital expenditure (capex) spend should help support valuations and sustain further gains from the current levels.
At the current price of ₹2,102, the stock is trading at 38 times its FY27 earnings per share. Tariff hikes by key players, lower capex and customer upgrade are among the major drivers for the stock.
Analysts, led by Sumangal Nevatia of Kotak Institutional Equities, expect a favourable market construct for the industry, with a reduction in capex intensity and improving average revenue per user (Arpu) aiding strong earnings and free cash flow growth.
They have an add rating and believe Bharti Airtel is the best direct telecom play in the listed space. The target price for the stock is ₹2,250. Among the triggers is the increase in tariffs, leading to a rise in Arpus.
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