BHARTIARTL - Bharti Airtel

📊 NSE: BHARTIARTL 🏢 Telecommunications - Service Provider 📅 Last Updated: 12/13/2025 19:28

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 16% to INR 1,74,559 Cr in fiscal 2025. In Q2 FY26, India Mobile Services revenue reached INR 28,116.7 Cr (up 2.6% QoQ), Passive Infrastructure Services grew 10% YoY to INR 8,188.3 Cr, while Airtel Business declined 7% YoY to INR 5,276 Cr and Digital TV fell 1% YoY to INR 753.2 Cr.

Geographic Revenue Split

India & South Asia contributed INR 38,690.1 Cr (73.8% of total) in Q2 FY26, while Africa operations contributed INR 13,679.5 Cr (26.2% of total).

Profitability Margins

Consolidated EBITDA margin stood at 57.4% in Q2 FY26, up from 56.8% YoY. Net income margin (before exceptional items) improved to 13.0% in Q2 FY26 compared to 9.0% in Q2 FY25, driven by higher ARPU and operational efficiencies.

EBITDA Margin

Consolidated EBITDA grew 21% to INR 94,733 Cr in fiscal 2025. For Q2 FY26, EBITDA was INR 29,919 Cr with a 57.4% margin, reflecting a 60 bps improvement YoY due to a 17% growth in India mobile ARPU.

Capital Expenditure

Consolidated Capex for Q2 FY26 was INR 11,362.3 Cr, a decrease from INR 14,400.8 Cr in Q4 FY25. India Mobile capex was INR 4,270.7 Cr in Q2 FY26, as the company transitions from heavy 5G rollout to steady-state maintenance.

Credit Rating & Borrowing

CRISIL upgraded the long-term rating to 'AA+/Positive' from 'AA/Positive' and reaffirmed 'A1+' for short-term debt. Net leverage improved to 2.1x in fiscal 2025 from 2.5x in fiscal 2024, reducing interest burden.

⚙️ Operational Drivers

Raw Materials

Access charges (2.5% of revenue), License fees & spectrum charges (7.3% of revenue), and Network operations costs (14.5% of revenue).

Import Sources

Network equipment and technology components are sourced globally (Europe, China, and USA), while spectrum is locally licensed from the Government of India.

Key Suppliers

Indus Towers (Passive Infrastructure), various global network equipment vendors (Ericsson, Nokia, Samsung), and local power utilities for network operations.

Capacity Expansion

Revenue earning customer base in India Mobile stood at 28 million for Bharti Hexacom; consolidated capacity is expanding through 5G densification and fiber-to-the-home (FTTH) rollout in Home Services.

Raw Material Costs

Network operations costs in India were INR 7,566.7 Cr in Q2 FY26, up 9.6% YoY. Procurement strategies focus on long-term contracts for passive infrastructure to hedge against energy price volatility.

Manufacturing Efficiency

Opex productivity (Opex as % of Revenue) for India was 27.9% in Q2 FY26, showing improved efficiency from 28.4% in the previous quarter.

Logistics & Distribution

Selling and distribution costs are captured within SG&A, which represents 5.5% of India revenue, impacted by a one-off hit in Q2 FY26.

📈 Strategic Growth

Expected Growth Rate

16%

Growth Strategy

Growth is targeted through a 17% ARPU increase in India Mobile, expanding the smartphone customer base (added 193,000 in Hexacom), and scaling the B2B 'Airtel Business' and 'Home Services' segments which have higher stickiness.

Products & Services

Telecom SIM cards (4G/5G), Broadband (FTTH), Digital TV (DTH), Enterprise connectivity solutions, and Passive Infrastructure services.

Brand Portfolio

Airtel, Bharti Hexacom, Airtel Business, Wynk Music, Airtel Thanks.

New Products/Services

5G Fixed Wireless Access (FWA) and IPTV (integrated into Digital TV from Q4 FY25) are expected to contribute 3-5% to incremental revenue.

Market Expansion

Expansion of 5G services to rural India and deepening fiber penetration in top 100 cities; Africa operations continue across 14 countries with a focus on mobile money.

Market Share & Ranking

Increased revenue market share in domestic mobile by ~400 bps between fiscal 2021 and 2025, maintaining a strong #2 position in India.

Strategic Alliances

Consolidation of Indus Towers and JVs in Africa for tower assets and undersea cable consortiums.

🌍 External Factors

Industry Trends

The industry is shifting toward 5G and converged digital services (Broadband + TV + Mobile). Airtel is positioning itself as a 'digital service provider' rather than just a 'telco' to capture higher wallet share.

Competitive Landscape

Intense competition in India from Reliance Jio; market is currently a 3-player private oligopoly which supports rational pricing.

Competitive Moat

Strong brand equity and high switching costs in the enterprise segment (Airtel Business) create a durable moat. The network effect from a 28M+ subscriber base in specific circles like Hexacom ensures long-term sustainability.

Macro Economic Sensitivity

Highly sensitive to consumer spending power in India and Africa; inflation in Africa led to hyperinflationary accounting adjustments in subsidiary books.

Consumer Behavior

Shift toward high-speed data consumption and bundled home entertainment services is driving the 17% ARPU growth.

Geopolitical Risks

Operations in 14 African countries expose the company to local political instability and regulatory shifts in repatriation of funds.

⚖️ Regulatory & Governance

Industry Regulations

Subject to TRAI regulations on tariffs and DoT norms on Adjusted Gross Revenue (AGR). License fees and spectrum charges accounted for INR 3,175.5 Cr in Q2 FY26.

Environmental Compliance

ESG initiatives are focused on reducing diesel consumption at tower sites, though specific INR costs are not disclosed.

Taxation Policy Impact

Effective tax rate is significant; current tax expense was INR 1,851.4 Cr in Q2 FY26, up 118% YoY due to higher taxable profits.

Legal Contingencies

Pending matters include AGR dues and spectrum usage charge disputes with the Department of Telecommunications; exceptional items of INR 853.7 Cr were recorded in previous periods for such contingencies.

⚠️ Risk Analysis

Key Uncertainties

Currency volatility in Africa and potential regulatory changes in India's spectrum allocation policy could impact margins by 2-4%.

Geographic Concentration Risk

74% of revenue is concentrated in India and South Asia, making the company vulnerable to Indian regulatory shifts.

Third Party Dependencies

Heavy reliance on Indus Towers for passive infrastructure; any disruption in tower availability would impact service quality for 28M+ customers.

Technology Obsolescence Risk

Rapid transition from 4G to 5G requires continuous high capex (INR 9,642.9 Cr in Sep-25) to avoid losing market share to technologically superior competitors.