Bharti Airtel has delivered 6% sequential growth in consolidated Ebitda to ₹33,302 crore in the June quarter (Q1FY27). But the Street isn’t impressed. The stock stayed flat post results, and is down 6% so far in 2026, as tariff hikes in India's mobile services business remain elusive.
India's mobile services account for nearly 80% of Airtel’s sum-of-the-parts (SoTP) valuation; hence, its prospects are critical.
India mobile Arpu (average revenue per user) rose 2.7% q-o-q in Q1FY27 to ₹264 due to a combination of factors such as higher number of days, upgrading customers from 2G services to 4G/5G and growth in postpaid users.
Airtel has used 5G network slicing technology to launch ‘fast lane’ for postpaid users in Q1FY27. This may have aided a 3.6% q-o-q increase in postpaid user base to 30 million.
The ‘fast lane’ plan enables fast and stable data speed in crowded areas for postpaid users, which now form about 8% of total user base that rose by about 20 bps q-o-q and 70 bps y-o-y. While the number of postpaid users has increased, it remains to be seen how much more the company can earn from each customer.
Nonetheless, higher Arpu led to 4% q-o-q increase in Ebitda of India mobile services to ₹18,187 crore. Airtel business or enterprise segment, the second biggest vertical, reported 5.7% q-o-q increase in Ebitda to ₹2,492 crore. The segment has been gaining momentum after winning several deals across cloud, core connectivity, security and internet of things. However, the huge gap in Ebitda of the top two verticals indicates that mobile services will stay the crucial driver for the stock.
Homes services (broadband internet services) and digital TV services had a poor quarter in terms of net subscriber addition. Homes services subscriber addition fell 58% q-o-q to 473,000, and digital TV addition was negligible. The Arpu of both segments remained flat q-o-q at ₹523 and ₹160, respectively.
Besides India, can Airtel’s investors hope for material gains from Africa telecom operations? The gains could come from two factors – Bharti increasing stake in Africa business beyond 79% and higher valuation multiples for the business.
Well, the gains may not be material. The value of Airtel’s stake in Airtel Africa based on the current market capitalization works out to ₹1.35 trillion. So, the business contributes about ₹200 per share to Bharti’s SoTP valuation. If Bharti buys the remaining 21% stake in Airtel Africa, the SoTP valuation increases by ₹40 per share. This hardly moves the needle for the stock, which is trading at ₹2,000.
Can Airtel Africa be assigned higher valuation multiples? Airtel Africa is trading at a price-to-earnings multiple of 17, based on annualized profit of Q1FY27. Even if a 50% higher multiple is assumed, Airtel’s value can increase by just ₹100 per share, which is just about 5% upside. So, Airtel’s stock may not see large upsides in the near term driven by Airtel Africa business.
In the long term, further value accretion for Airtel’s shareholders will depend on profits from its Africa telecom operations. For now, the stock might remain range-bound. Apart from tariff hike, a higher-than-expected IPO valuation for Reliance Industries’ telecom business Jio Platforms, can act as a re-rating catalyst for the Bharti stock.