Bharti Airtel Upgraded to 'Buy' by Kotak, Sees 26% Upside

Kotak Equities Upgrades Bharti Airtel

Kotak Institutional Equities has upgraded its rating on Bharti Airtel Ltd. to 'buy' from 'add', maintaining a price target of ₹2,250 per share. The brokerage's projection suggests a potential upside of 26.3% from the stock's previous closing price. The upgrade comes despite a minor decline in the company's shares on Thursday, April 2, 2026, when the stock was trading 1.5% lower at ₹1,755.4.

The positive revision is based on the resilience of Bharti Airtel's wireless business, which continues to see gradual market share gains. Kotak also anticipates a near-term hike in the average revenue per user (ARPU), a key performance metric for telecom operators. This upgrade reinforces a broadly bullish sentiment among analysts covering the telecom major.

Rationale Behind the Upgrade: Lower Capex and Deleveraging

A significant factor in Kotak's optimistic outlook is the forecast for lower capital expenditure (capex) over the financial years 2026 to 2028. The brokerage expects capex to fall to 21-22% of revenue during this period, a notable decrease from the historical average of 30%. This reduction in spending is anticipated to be a primary driver for deleveraging the company's balance sheet and increasing shareholder payouts.

Furthermore, Kotak believes that concerns regarding capital allocation towards the company's planned Non-Banking Finance Company (NBFC) are overstated. The brokerage noted that the recent correction in the stock price has made the risk-reward profile more attractive, with the stock trading at 8 times its estimated EV/EBITDA for the financial year 2028.

Analyst Consensus and Target Prices

The bullish stance from Kotak aligns with the broader market consensus. Out of 31 analysts covering Bharti Airtel, 27 have a 'buy' rating, while only one recommends 'hold' and three suggest 'sell'. This indicates strong confidence in the company's growth trajectory and financial management.

Other brokerage firms have also expressed positive views with strong target prices, reflecting a shared optimism about the company's prospects.

Strategic Growth Areas and Financial Health

Bharti Airtel's strategy extends beyond its core mobile services. The company has identified its Homes, Enterprise, and Data Centre divisions as key areas for accelerated capital expenditure and growth in the coming years. This diversification is expected to build new revenue streams and strengthen its market position. The company also recently announced crossing the 650 million customer milestone, underscoring its expanding reach.

Financially, the company has demonstrated robust performance. Its Q2 FY26 results showed significant profit growth and continued leadership in ARPU, which stood at ₹256. This strong operational performance has been recognized by global rating agencies, with both S&P Global Ratings and Moody's upgrading Bharti Airtel's credit profile in late 2025, signaling improved financial stability and lower risk.

Capital Allocation for NBFC Venture

In February 2026, Bharti Airtel announced its intention to establish a large-scale NBFC through its subsidiary, Airtel Money. The plan involves a capitalization of ₹20,000 crore, with Airtel contributing ₹14,000 crore. While some view this as a non-core investment, brokerages argue that the equity infusion is manageable. Given Bharti's potential consolidated free cash flow of ₹60,000 crore to ₹70,000 crore annually and a market capitalization of around ₹12 trillion, the investment is considered small in comparison.

Market Performance and Outlook

Despite the positive long-term outlook, Bharti Airtel's stock has faced some short-term pressure, trading down 6.5% over the last 12 months as of early April 2026. However, its performance in 2025 was strong, with the stock gaining over 30% and hovering near record highs for much of the year. The current valuation, combined with strong fundamentals, underpins the 'buy' recommendation from multiple analysts.

The combination of moderating capex, consistent ARPU growth, market share gains, and strategic expansion into new business segments positions Bharti Airtel for sustained growth. The focus on deleveraging and enhancing shareholder returns is expected to be a key theme for the company moving forward.