International brokerage house, CLSA has identified Bharti Airtel as its top pick for the Telecom sector. It has maintained its ‘Buy’ rating on the stock, with a target price of Rs 1,880. This implies an upside of almost 15% from the current market price. The revenue outlook coupled with new user additions are among the key reasons for the positive rating.
Why is Bharti Airtel CLSA’s top pick?
CLSA chose Bharti Airtel as the top pick based on leading and growing average revenue per user (ARPU). The company’s ARPU growth was 21% higher in Q3 FY25 compared to that of Reliance Jio and it was 14% higher in Q3 FY24. It has also garnered a higher share of the market.
Data and usage have grown across the telecom sector implying that there is a limited impact of tariff hikes on the rate of growth for telecom users. Most telecom companies have seen sequential growth in ARPUs for Q3 and Bharti Airtel has clocked one of the highest in the industry.
The company has also benefitted directly from the subscriber loss reported by Vodafone Idea. Most analysts believe that Bharti Airtel has been able to add a significant number of new subscribers and this is potentially one of the reasons.
CLSA expects that the company will see a 15%-18% compounded annual growth rate in Indian mobile revenue EBITDA over FY24-27. The stock is trading at an enterprise multiple of 10x of FY26. The enterprise multiple indicates how much a potential acquirer is likely to pay considering the debt levels of the company. A higher multiple suggests a higher valuation for the company relative to its earnings potential.
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The company reported a net profit of Rs 14,781 crore for the third quarter of the current financial year. After adjusting the net profit for the exceptional items, its growth was 121% year-on-year at Rs 5,514 crore, compared to Rs 2,442 crore in Q3 FY24. The company’s revenue from operations increased 19% YoY to Rs 45,129 crore as against Rs 37,900 crore in Q3 of the previous fiscal year. The company posted an ARPU of Rs 245 in Q3 2025, which was industry-leading,
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