532454: AI Partnerships And Network Expansion Will Likely Support Balanced Outlook

Analysts have modestly raised their fair value estimate for Bharti Airtel from ₹2,245.63 to ₹2,281.12 per share, citing slightly stronger long term revenue growth expectations that more than offset a marginally lower projected profit margin and a small uptick in future valuation multiples.

What's in the News

• Expanded its mobile network to Man and Merak on the eastern border of Ladakh, becoming the only operator to offer coverage along the 50 km stretch between Chushul and Pangong Tso. This expansion improves connectivity for residents, security forces, and tourists and supports local tourism potential (Key Developments).
• Entered a strategic partnership with IBM to strengthen Airtel Cloud with IBM Power systems and AI ready infrastructure, targeting mission critical workloads and AI inferencing for regulated sectors such as banking, healthcare, government, and SAP based enterprises (Key Developments).
• Formed a landmark alliance with Google to build India’s first AI hub in Visakhapatnam. The collaboration involves an approximately 15 billion dollar multi year investment in data centers, subsea cables, and high capacity fiber to support AI workloads and enhance India’s digital backbone (Key Developments).
• Won a multi year mandate from Indian Railway Security Operations Centre to provide end to end cybersecurity for India’s railway network, deploying AI driven monitoring and multi layer security to protect critical operational and customer data (Key Developments).
• Partnered with Swift Navigation to launch Airtel Skylark Precise Positioning Service, an AI and cloud based location platform that promises up to 100 times better accuracy than standard GNSS for applications in transportation, logistics, tolling, agriculture, and smart infrastructure (Key Developments).

Valuation Changes

• The fair value estimate has risen slightly from ₹2,245.63 to ₹2,281.12 per share, reflecting a modestly more optimistic outlook.
• The discount rate is unchanged at 12.76 percent, indicating no revision to the perceived risk profile or cost of capital.
• The revenue growth assumption has increased marginally from 12.84 percent to 12.87 percent, suggesting a slightly stronger long-term growth trajectory.
• The net profit margin forecast has edged down slightly from 19.11 percent to 19.05 percent, incorporating a modestly more conservative profitability outlook.
• The future P/E multiple has risen moderately from 35.05x to 35.69x, implying a small upward adjustment in expected market valuation levels.