Bharti Airtel is quickly becoming one of India’s most reliable money machines in the telecom sector.
The company is riding a wave of strong growth, thanks to sector consolidation, tariff power, and shrinking capital expenses.
Kunal Vora, Head of India Equity Research at BNP Paribas, sums it up simply: “Telecom is like petrol — you have to just fill it.” That means, just like petrol, mobile services are a must-have expense. This reality is turning Bharti Airtel into a strong compounder in a capital-heavy industry.
What does this mean for the average person? Simply put, just as no one avoids paying petrol prices even when they go up, Airtel’s customers accept tariff hikes as a necessary part of life.
Vora’s team found that consumers see mobile phone bills the same way. This mindset allows Bharti Airtel to increase prices regularly—roughly every two years—without losing customers. This steady pricing power is a rare advantage in a competitive market.
The telecom landscape in India has changed dramatically. Once, there were about ten players fighting aggressively. Today, the entry barrier is so high, with minimum capital requirements around $25 billion and scarce spectrum availability, that only a few big players like Airtel remain. This scarcity means Airtel has a strong hold on the market and can keep growing revenues steadily.
Also Read Allcargo Logistics Slides as Q4 Loss Widens — What’s Really Behind the Rs 13 Crore Red Flag?
For investors, this translates to impressive numbers. When Airtel raises tariffs, revenue can grow by 18–19%. Without hikes, growth still stays healthy at around 8–9%. Over time, this averages to a compound annual growth rate (CAGR) of 13–14%, a very attractive figure in a sector often weighed down by heavy investments.
Even though some might argue Airtel’s valuations are high, Vora points out that traditional valuation models like discounted cash flow (DCF) don’t fully capture the company’s structural advantage. Compared to other consumer staples trading at price-to-earnings (P/E) multiples of 45–50, Airtel’s P/E of 22–25 times earnings in fiscal year 2027 looks reasonable.
The company’s service has become a lifeline for millions, much like petrol, making it less vulnerable to price shocks.
Also Read Why Did Singtel Just Walk Away with $1.54 Billion—and What It Means for Airtel?
Looking ahead, growth won’t just come from reaching more mobile users, since India already has high mobile penetration. Instead, Airtel is focusing on new opportunities. These include 5G upgrades, gaining market share from smaller competitors, expanding home broadband, enterprise solutions, and data-center services.
With capex costs falling and no major spectrum auctions expected soon, the company is well-positioned for sustained growth.
In summary, Bharti Airtel is not just surviving; it is thriving. It’s a telecom giant with a pricing advantage and multiple growth engines. For investors seeking a compounder with steady returns, Airtel looks like a solid bet.
