Why Nomura believes Bharti Airtel’s ‘unwarranted discount’ can fuel a 28% rally
Nomura has named Bharti Airtel as its top sector pick among the telecom stocks. The brokerage house raised its price target on the stock to Rs 2,355 from Rs 2,220, implying an upside of 28%. The broker retained its ‘Buy’ rating.
Free Cash Flow (FCF) upcycle and deleveraging
With the 5G rollout largely complete, Nomura said that it believes Bharti’s capital expenditure (capex) intensity has passed its peak. This shift is expected to result in strong free cash flow generation, leading to a significant deleveraging cycle where consolidated net debt-to-EBITDA is projected to fall from 1.4x in FY26 to 0.1x by FY29. This is likely to be driven by an expected tariff hike (likely in Q3 FY27), operating leverage, and ongoing premiumisation.
