S&P upgrades Bharti Airtel credit rating on strong earnings momentum

S&P Global Ratings on Monday upgraded Bharti Airtel's credit rating to "BBB" from “BBB-”, with a positive outlook, on expectations of a strong earnings growth over the next 24 months.

The rating company expects the company’s growth to be driven by its Indian operations. It expects Airtel to increase subscribers by 2-4% with an average revenue per user (Arpu) growth of 6-8% over the same period. The growth would come from customers' upgrades to higher-priced plans and more data consumption.

“The positive outlook reflects our view that Bharti Airtel's continued deleveraging, and a correspondingly supportive leverage tolerance, could support a higher long-term issuer credit rating over the next 24 months,” S&P Global said in a note.

Notably, S&P Global said the ratings on Bharti Airtel are not constrained by its sovereign rating on India, which is “BBB” with a stable outlook.

An improvement in the rating for the company has come at a time when the Supreme Court permitted the government to provide relief to Vodafone Idea on the additional adjusted gross revenue (AGR) dues for the period up to 2016-17. Following this, Bharti Airtel also said it will take up its case with the department of telecommunications (DoT) for reconsideration of AGR dues.

Bharti Airtel has been able to increase its Arpu in the Indian mobile segment faster through the industry-wide tariff hikes in July 2024. Last year, Bharti Airtel, along with other operators, raised prices of its mobile plans by 10-21%.

The company’s Arpu reached ₹256 in July-September. Airtel saw a 2.4% sequential increase in Arpu compared to Reliance Jio’s 1.2% growth to ₹211.4 at the end of September quarter. Arpu is an important measure for telecom companies—the higher it is, the stronger the business.

Bharti Airtel has also been gaining wireless subscribers, alongside the largest telecom operator, Reliance Jio Infocomm, partly benefitting from the churn in third-placed Vodafone Idea Ltd, said analysts at S&P Global in the note.

Bharti Airtel had 364 million wireless customers as of September 2025, up from 351 million a year ago. The company reported a revenue of ₹52,145 crore in the September quarter, up 25.7% from a year ago, and 5.4% from the preceding quarter’s ₹49,463 crore. The company’s revenue was largely driven by an increase in its mainstay mobile services business, with a focus on premium services and growth in Airtel Africa.

Its net profit rose 89% from a year earlier to ₹6,792 crore, helped by lower losses at its associate and joint ventures during the quarter. Lower finance cost also boosted the profit during the quarter. On a sequential basis, Airtel’s net profit rose 14.2% from ₹5,948 crore in the preceding quarter.

Even as S&P Global gave a positive rating for Bharti Airtel, it has expressed concern that rising debt at Bharti Airtel’s parent Bharti Telecom Ltd could weigh on its improvement in creditworthiness.

A higher debt load at Bharti Telecom carries the risk of the company depending on dividends from Bharti Airtel to service its debt, S&P Global said.