Bharti Airtel market cap nears ₹10 lakh crore, stock gains 62% in 2024, adds ₹3.7 lakh crore

Shares of Bharti Airtel, one of India's top telecommunications service providers, have maintained strong upward momentum on Dalal Street. The stock has consistently hit new lifetime highs and crossed significant milestones, resulting in stellar returns for its investors. 

The stock hit a fresh all-time high of ₹1,675 per apiece,  representing a 62 percent gain so far in 2024. This surge has lifted the company's market capitalisation to ₹9.7 lakh crore, putting it on the brink of joining India's ₹10 lakh crore club, a feat achieved by only a handful of companies in the country.

Over the past nine months, Bharti Airtel has added ₹3.66 lakh crore in market value. The stock has posted gains for the past seven months, posting gains in each of the last six months, including an additional 6 percent this month.

This steadily strong performance highlights growing investor confidence in the company’s business prospects, buoyed by its strong position 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 capitalisations exceeding ₹10 lakh crore. Bharti Airtel is on track to become the fourth member, should its share continue to rise at its current pace. 

This year marks the sixth consecutive year of positive performance for the stock. Over the past five years, the stock delivered consistent returns, rising  59 percent in 2019, 12 percent in 2020, and 18 percent in 2021.

In 2022 and 2023, it added another 18 percent and 28 percent, respectively. In total, the stock surged an impressive 267 percent surge during this period.

Bharti Airtel's B2B arm, Airtel Business, recently 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 by improving low-latency routes between Asia and Europe, catering to a growing demand for data services in India and neighbouring regions.

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

Industry-leading ARPU

In FY24, Airtel surpassed 350 million mobile customers and 250 million data users, adding 28.6 million new smartphone users, driven by its rural expansion efforts.

Airtel's ARPU climbed to an industry-leading ₹209, which 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 percent and 20.7 percent 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 percent 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 fibre-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 percent-9 percent for FY26 and FY27, projecting a robust 19 percent EBITDA CAGR for the FY24-27 period. It expects a 10 percent 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 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.