Bharti Airtel Surges as Nomura Raises Target Price, Pinpointing Tariff Hikes and Premiumisation Potential

Bharti Airtel Surges as Nomura Raises Target Price, Pinpointing Tariff Hikes and Premiumisation Potential​

Bharti Airtel shares experienced a strong rally on June 30th, trading up nearly 2 percent in the afternoon session. The stock movement was buoyed by positive commentary from Nomura, which reaffirmed its bullish stance and significantly upgraded its price target for the telecom giant.

Nomura maintains a 'Buy' rating on Bharti Airtel stock after raising its target price to Rs 2,355 per share. This represents an uplift from the previous target of Rs 2,220, suggesting potential upside of around 28 percent from earlier trading levels.

Nomura Targets Significant Growth Driven by Tariff Expectations​

The brokerage firm cited multiple factors supporting this aggressive outlook. Key among these is the expectation of future tariff hikes, which are anticipated to occur in the third quarter of FY27. This, combined with operating leverage and continuous premiumisation efforts, is expected to drive financial performance.

Nomura projects that Bharti Airtel's EBITDA and free cash flow will grow at a compound annual growth rate (CAGR) of approximately 14 percent each between FY26 and FY29. Stronger cash generation is also expected to support higher dividend payouts over time.

Strategic Advantages Fuel Premium Valuation​

The brokerage argues that Bharti Airtel merits a valuation premium relative to its global telecom peers. This assessment rests on several structural advantages inherent to the company’s market position in India.

These advantages include the favourable structure of the Indian telecom market and significant headroom for Average Revenue Per User (ARPU) growth. Furthermore, the company possesses multiple growth optionalities extending beyond core connectivity.

Bharti Airtel's ARPU stood at Rs 257 at the end of March, a marginal dip from Rs 259 in the preceding quarter. Nomura also highlighted long-term opportunities such as data centres, Airtel Money, digital lending, and its increasing stake in Indus Towers.

Credit Rating Upgrade Signals Financial Stability​

Separately, Bharti Airtel recently received an upgrade to its long-term credit rating from S&P Global Ratings. The agency moved the rating from BBB to BBB+, acknowledging the company's improving earnings and disciplined capital management.

S&P anticipates that continued subscriber additions and steady ARPU growth in India will support earnings expansion over the next one to two years. Additionally, the strengthening cash flows are expected to assist in further reducing the company’s leverage.

Stock Performance Amid Market Movement​

On June 30th, Bharti Airtel shares were trading at Rs 1,871.70, closing as a top Nifty gainer amidst broader market movements. Despite this positive movement, the stock has seen some volatility over the past year. It has declined about 6.9 percent in comparison to the Nifty 50's decline of 6.1 percent.

The company maintains a substantial market capitalisation approximating Rs 11.4 lakh crore.