The Street keenly awaited Bharti Airtel’s board meeting outcome on Wednesday, more for its agenda of Africa telecom business ownership restructuring rather than the March quarter (Q4FY26) results announcement. Investors heaved a sigh of relief as the exercise simplifies the holding structure of Africa telecom business. Bharti Airtel’s shares were up 5% on Thursday to ₹1,883.50.
Bharti Airtel and its promoter group, through Indian Continent Investment Ltd (ICIL), hold 62.73% and 16.31% stakes in Airtel Africa Plc. Bharti Airtel will buy out ICIL’s stake at a 11.6% discount to Airtel Africa’s last closing price, effectively at GBP 3.66 apiece.
Importantly, there won’t be any cash outflow. The consideration of ₹28,220 crore will be paid by issuing 146.76 million shares of Bharti Airtel to ICIL at ₹1,923, which is far above Wednesday’s closing price of ₹1,789.20. This will mean equity dilution of 2.4% for Bharti Airtel, but it would be marginally earnings per share (EPS) accretive.
While the transaction structure does ease investor concerns, worries about capital allocation persist. Note that the Bharti Airtel stock has been under pressure ever since it announced its entry into NBFC business on 23 February. The stock was at ₹1,997 before the announcement and has been gradually losing ground, suggesting investors are not enthused by this diversification.
In the Q4FY26 earnings call, chairman Sunil Mittal said it must be noted that Bharti Airtel is entering the NBFC business in “a small and controlled manner”. It intends to hold 70% stake in the NBFC with a planned investment of ₹14,000 crore in phases. The balance 30% stake will be held by Bharti Airtel’s promoters.
Meanwhile, Q4FY26 results do not bring any surprises. India mobile subscriber base crawled up by 1% sequentially to 373 million, and average revenue per user (Arpu) fell to ₹257 from ₹259. But the Arpu comparison is somewhat distorted as Q4 has two fewer days versus Q3. Mobile services Ebitda was almost flat at ₹17,479 crore.
Data usage per customer rose by 5% QoQ to 31.4 GB per month, but it did not lead to corresponding growth in revenue as tariff rate was unchanged. Unless mobile companies use network slicing to offer differentiated user experience in terms of speed, the sector would find it tough to grow mobile revenues hereon.
Volume growth prospects in terms of more subscribers, especially from portability, have also diminished as Vodafone Idea’s survival has been reassured by substantial reduction in adjusted gross revenue (AGR) dues and Kumar Mangalam Birla returning as the chairman to steer the company.
Bharti Airtel’s FY26 operating free cashflow from India mobile business alone was robust at about ₹50,000 crore. Mittal clarified in the earnings call that the management is open to distributing the huge free cash generation with shareholders through dividends and buybacks, but this won’t be like IT companies.
He said instead of acquiring companies or pursuing growth in artificial intelligence era, IT companies are only focused on returning cash to shareholders. Mittal believes that organizations should focus on investment opportunities for growth and in this context, Africa telecom business offers a rare opportunity.
The Bharti Airtel stock is down about 11% so far in 2026. It trades at an EV/Ebitda of 10x based on consolidated earnings estimates of Bloomberg for FY27. This does not seem pricey given the utility nature of telecom business.