Bharti Airtel, a major telecom company in India, is expected to increase its dividend payout significantly by fiscal year 2027. Analysts at HSBC predict that Airtel’s dividend will soar from Rs 8 per share to Rs 34 per share, which is a fourfold increase! This is much higher than what many experts thought, by as much as 45%.
For fiscal 2025, they expect dividends to jump by 114% to Rs 17 per share. This boost will help Bharti Telecom Ltd, which owns a big part of Airtel, deal with its rising debt.
HSBC says Airtel is doing really well in the market because it’s gaining more customers and has a strong home broadband service. They keep their “buy” recommendation for Airtel’s shares, with a target price of Rs 1,940, which means there’s a likely 22% profit potential.
Three main reasons support Airtel’s growth:
1. Increasing Average Revenue Per User (ARPU): It’s expected that more users will pay higher prices because of better services, like new tariffs and increased data usage. By 2027, ARPU is predicted to reach Rs 301.
2. Broadband Growth: Airtel’s home broadband service is booming, with expected revenue growth of 24% each year until 2027. Subscriber numbers might double to 15.9 million during this time.
3. Cost Reductions: After completing its 5G network and expanding into rural areas, Airtel’s costs will go down, which will result in even more free cash flow. Last year, they reported over Rs 39,000 crore in free cash flow, showing their strong money situation.
Even though Airtel’s stock dipped slightly by 0.1% to Rs 1589.50 on the BSE this week, the shares have gone up by 51% in the last year.
(Note: The views expressed by experts do not necessarily reflect those of thellv.news)
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