Bharti Airtel’s share has fallen around 15% so far this 2026, underperforming the Nifty 50 by about five percentage points. Much of the decline came after the company announced plans to enter the NBFC business. Will Bharti Airtel’s move to enter the NBFC space impact its profitability?
Jefferies retained its ‘Buy’ rating on Bharti Airtel but trimmed its target price to Rs 2,250 from earlier target price of Rs 2,575. The new target price implies a potential upside of about 25% from the current levels.
The brokerage said it reduced the target price factoring in risks related to delayed tariff hikes, rising energy costs and the company’s entry into the NBFC segment. Here is a detailed analysis –
NBFC venture may add limited upside to Bharti Airtel valuation: Jefferies
Bharti Airtel plans to infuse Rs 14,000 crore, as part of a Rs 20,000 crore investment by the Bharti group, into the proposed NBFC venture.
Jefferies noted that the move has raised concerns around capital allocation as the NBFC industry is already dominated by a few large players.
“Infusion of Rs 20,000 crore (Rs 140 bn from Bharti Airtel) will position the new NBFC among the top NBFCs by networth suggesting that further capital may not be needed,” Jefferies said.
However, the brokerage estimates the NBFC venture could add around 3% to the company’s market capitalisation in the best case, while the downside impact could be about 1% in the worst case.
Telecom tariff hikes unlikely before June 2026: Jefferies
The brokerage said the chances of telecom tariff hikes before June 2026 appear low due to two key reasons.
First, rising energy prices could push inflation higher, making tariff increases difficult. Second, delays in the regulatory process related to the IPO of Reliance Jio could postpone sector-wide tariff hikes.
Jefferies expects a single tariff hike of around 15% in December 2026 during FY26–FY28.
Jefferies sees 13–14% CAGR growth
Jefferies expects the telecom operator to deliver 13–14% CAGR growth in India revenues and EBITDA over FY26–FY28.
The growth will likely be driven by India’s mobile business and the Africa operations.
The brokerage estimates that India’s mobile ARPU could rise from around Rs 259 in the third quarter of FY26 to about Rs 313 by FY28.
Bharti Airtel’s renewable shift cushions energy price shocks
Jefferies noted that Bharti Airtel’s exposure to potential energy price shocks has reduced over year.
Over the past five years, the company has reduced energy cost per site by 19% by increasing renewable energy usage, solarising around 31,000 network sites, and lowering diesel consumption.
As a result, fuel and energy costs have fallen to about 8% of sales, helping reduce the company’s vulnerability to energy price shocks.
Conclusion: Risk-reward remains favourable
Jefferies believes Bharti Airtel offers an attractive risk-reward profile despite near-term challenges.
The brokerage estimates a base-case fair value of Rs 2,250, with a potential bull-case valuation of Rs 2,890 if tariff hikes reach around 30% over FY27–FY28.
However, in a downside scenario where tariff hikes do not materialise, the stock could fall to around Rs 1,570, according to the report.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.