Bharti Airtel’s shares were inching higher on Wednesday after HSBC said it was upbeat on the telecom giant’s outlook and growth.

What Happened: Bharti Airtel received a bullish call from HSBC, which upgraded the telecom giant’s rating from “hold” to “buy” and significantly raised its price target to ₹1,950, up from the previous ₹1,325. The target price reflects an upside of 13.6% from its last close.

HSBC’s upgrade factors in its confidence in Bharti Airtel’s future growth, particularly in its mobile and home broadband segments.

HSBC’s optimism stems from its revised estimates for mobile average revenue per user (ARPU) for the fiscal year ending 2027 (FY27) and an improved forecast for home broadband subscribers.

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The bank anticipates strong market growth as 5G fixed wireless access (FWA) expands and fibre-to-the-home (FTTH) connections increase, factors that are expected to enhance Bharti Airtel’s financial performance.

HSBC expects Bharti Airtel's EBITDA and earnings per share (EPS) to grow at an annual growth rate of 16% and 78% between FY24 and FY27, respectively. This growth is expected to be driven by rising mobile ARPU, robust broadband subscriber growth, and improved margins.

Additionally, HSBC foresees a reduction in Bharti Airtel’s capital expenditure intensity, a boost in free cash flow (FCF), and a decrease in its net debt-to-EBITDA ratio to 1.5 times by FY26, which augur well for the company's future financial stability and profitability.

Price Action: Airtel’s share price ticked up slightly to trade 0.35% higher at ₹1,723.30 in early trade on Wednesday amid weak overall market sentiment. The stock has gained over 70% so far this year.

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