Bharti Airtel Shares: Top Bluechip Stock for SIP
Bharti Airtel Ltd is a prominent global provider of telecommunications services, operating in 18 countries, including India, Sri Lanka, and 14 nations across Africa.
Positives:
- Strong Balance Sheet
- Strong Cashflow
- Strong Reinvestment for Growth
- Strong Operating Profit Margins
- High Return on Equity
Negatives:
- High Price to Book
Bharti Airtel Share Price Target
Our Views on the stocks, continue to add on dips and on regular basis. Stock can easily double in 18 months and also move 4-5x in 5 years. One of the strongest Bluechip in India to invested through SIP. Warren Buffet would have loved to add this stock at any price below 1500 and hold for long term.
Target 3500 in 18 months and 9000 in 5 years.
Track all our Long term Value+Growth Stocks
Segments & Presence
The company operates across various segments including Mobile, Broadband, DTH, and Banking. Its geographical presence spans India, Africa, Bangladesh, and Sri Lanka.
Digital Services
- Financial Services: Airtel Finance
- Cloud Communication: Airtel IQ
- Data Centres: Nxtra
- Entertainment: Xstream, Wynk Music
- Payments: Airtel Payment Bank
- Cloud and Security Partnerships: Collaborations with Google, AWS, Microsoft, Cisco, Fortinet, and Zscaler.
Market Leadership FY24
- World Ranking: No. 3
- Revenue Market Share: Approximately 37%
- Spectrum Share: 33%
- Broadband Market Share: 19%
- DTH Market Share: 29%
- Average Revenue Per User (ARPU): ₹209
Revenue Split FY24
- India: 57%
- Africa: 27%
- Enterprise, Broadband, and DTH: 16%
Manufactured Capital FY24
- Mobile Network Towers: 355,000
- Mobile Broadband Base Stations: 752,136
- Optic Fiber Network: 440,000 Rkms
- Submarine Cable Systems: 7
- Data Centres: 12
- Edge Data Centres: 120
In FY24, the company deployed over 43,000 sites, expanded its fiber network by 56,000 Rkms, and added fiber home passes to an additional 6.9 million households.
Network FY24
- International Presence:
- Countries: 14 in Africa, 2 in South Asia
- Customers: Over 210 million
- Retail Touchpoints in Africa: 3.3 million
- Airtel Money Transaction Value: $112 billion
- India:
- Customers: Over 352 million
- Monthly Active Users on Digital Assets: 220 million
- Enterprises Served: 3,500
- Offices: 1 million+
Strategic Partnerships
The company has established partnerships with major players including Amazon, Cisco, Ericsson, Google, IBM, Intel, Meta, Microsoft, Netflix, Nokia, Oracle, Qualcomm, and Samsung. Notably, on October 24, the company partnered with Kia for its Kia Connect 2.0 platform.
Stake in Indus Towers
The company has increased its stake in Indus Towers to approximately 48%, capitalizing on a stabilizing industry structure and opportunities for future 5G rollouts.
Mergers & Acquisitions
The company acquired an additional 4.7% equity interest in Indus Towers from Vodafone Plc at around ₹188 per share. It also increased its stake in Vahan Inc. as part of its Startup Accelerator Program by 2.9% and agreed to acquire a strategic stake in Aqilliz, a Blockchain as a Service company. Additionally, it acquired a 25% strategic stake in SD-WAN startup Lavelle Networks.
Tariff Hike
On June 24, the company implemented a tariff increase of 17-19%, aiming for an ARPU target of ₹300.
Capital Expenditure (Capex)
Capex spending was around 26% in FY23 and FY24, with no major upcoming expenditures anticipated as mass 5G networks are now established. Spectrum capex is also expected to decrease following substantial spectrum purchases in FY23, where the company invested ₹43,084 crores for pan-India 5G rollout. In the June 2024 auction, it won ₹6,857 crores worth of spectrum, primarily for license renewals, with potential continued investment in Africa.
Investment by Google International LLC
Google will invest up to $1 billion in partnership with Airtel as part of its Google for India Digitization Fund. This includes a $700 million investment for a 1.28% ownership stake in Airtel and up to $300 million for potential multi-year commercial agreements.
Allotment of Shares
On October 24, the company allotted 5,693,336,299 fully paid shares with a face value of ₹5 and 392,287,662 partly paid-up equity shares (paid-up value of ₹1.25 each). Following this allotment, the outstanding principal value of the company’s USD 1,000 million 1.50% Convertible Bonds due 2025, issued in FY2020, has been reduced to USD 62.90 million.
High Debt
As of FY24, the company’s borrowings stood at ₹1,52,000 crores, with an interest expense of ₹22,186 crores.
Focus
The company continues to prioritize premiumization and attracting quality customers, resulting in ARPU growth even without tariff hikes. It has proactively invested in creating a 5G-ready network through strategic partnerships and extensive testing of multiple use cases.
