Strong subscriber growth, improving ARPU, expanding digital businesses and a potential tariff hike in late 2026 are expected to drive the next phase of earnings growth for the telecom giant.

Bharti Airtel Ltd. continues to attract positive attention from global brokerages, with Morgan Stanley reiterating its 'Overweight' rating on the telecom major and setting a target price of ₹2,480, implying an upside potential of nearly 34% from current market levels.

The brokerage expects Airtel to post another healthy set of quarterly results, supported by steady subscriber additions, improving customer quality, higher data consumption and continued expansion across broadband, enterprise and international operations. More importantly, Morgan Stanley believes an industry-wide mobile tariff hike expected later this year could become the biggest catalyst for accelerating revenue growth, profitability and shareholder returns over the next few years.

As India's telecom sector continues to consolidate around a few dominant players, Airtel appears well positioned to capitalize on rising demand for high-speed connectivity, digital services and premium customer offerings.

Morgan Stanley Maintains Strong Bullish Outlook

Morgan Stanley believes Bharti Airtel remains one of the highest-quality businesses in the Indian telecom sector, supported by disciplined execution and multiple long-term growth drivers.

The brokerage highlighted several strengths that underpin its positive outlook:

• Healthy subscriber growth.

• Consistent ARPU expansion.

• Strong market positioning.

• Diversified revenue streams.

• Improving operational efficiency.

• Robust cash generation.

These factors are expected to support sustainable earnings growth over the medium term.

Tariff Hike Could Transform Earnings Profile

According to Morgan Stanley, the biggest trigger for Airtel's next phase of growth will likely be an industry-wide tariff revision.

The brokerage expects telecom operators to announce a 16–20% increase in 4G and 5G tariffs during November or December 2026.

A tariff increase of this magnitude could significantly improve:

• Average Revenue Per User (ARPU).

• Operating margins.

• Free cash flow.

• Return on Capital Employed (ROCE).

• Dividend-paying capacity.

With data consumption continuing to rise, analysts believe customers are becoming more willing to pay for premium connectivity and higher-value plans.

Subscriber Quality Continues to Improve

Airtel's focus on premium customers remains one of its biggest competitive strengths.

Morgan Stanley expects the company to continue benefiting from:

• Migration of users from 2G to 4G.

• Rapid adoption of 5G services.

• Shift from prepaid to postpaid plans.

• Increasing smartphone penetration.

• Higher digital engagement.

These structural trends continue to improve the overall quality of Airtel's subscriber base and support steady ARPU growth.

Mobile Business Expected to Deliver Steady Growth

The brokerage projects Airtel's India mobile business to maintain healthy momentum during the June quarter.

Key expectations include:

• Around 3.5 million net subscriber additions.

• Approximately 5 million new 4G subscribers.

• Strong year-on-year mobile revenue growth.

• Stable operating margins.

Higher customer retention and premium plan upgrades are expected to remain the primary drivers of mobile revenue.

Broadband and Enterprise Businesses Gain Momentum

While mobile services remain Airtel's largest revenue contributor, the company's non-mobile businesses continue to grow rapidly.

Home Broadband

Increasing demand for high-speed internet, remote work and digital entertainment continues driving broadband subscriber growth.

Enterprise Solutions

Corporate demand for cloud connectivity, cybersecurity, managed services and digital infrastructure remains robust.

Digital Services

Expansion across cloud, data centres, IoT and enterprise networking continues creating new revenue opportunities.

Morgan Stanley expects these businesses to grow faster than the mobile segment over the next few years.

Airtel Africa Continues to Strengthen Group Earnings

Airtel's African operations remain an important pillar of its diversified business model.

The brokerage expects continued growth driven by:

• Strong subscriber additions.

• Mobile money expansion.

• Favourable currency movements.

• Higher data usage.

• Improving operating leverage.

The international business provides geographic diversification and reduces dependence on the domestic telecom market.

Capital Expenditure to Support Future Expansion

Airtel continues investing aggressively to strengthen its network and digital infrastructure.

Key investment areas include:

• Nationwide 5G rollout.

• Fibre network expansion.

• Data centre development.

• Enterprise infrastructure.

• Cloud platforms.

• Digital financial services.

Although capital expenditure remains elevated, these investments are expected to generate long-term returns through stronger customer acquisition and higher network quality.

Telecom Industry Fundamentals Continue to Improve

India's telecom industry is entering a phase of stronger financial discipline following years of intense competition.

Key industry trends include:

• Rising data consumption.

• Growing smartphone penetration.

• Expansion of digital payments.

• Higher enterprise connectivity demand.

• Increasing adoption of cloud computing.

• Strong demand for fibre broadband.

These structural factors provide a favourable operating environment for leading telecom operators.

Strong Cash Flows Could Support Higher Shareholder Returns

Morgan Stanley believes Airtel's improving earnings profile will translate into stronger cash generation over the coming years.

Higher free cash flow could support:

• Increased dividend payouts.

• Faster debt reduction.

• Continued network investments.

• Strategic acquisitions.

• Digital business expansion.

Improving capital efficiency remains one of the company's key long-term strengths.

Key Risks Investors Should Monitor

Despite the positive outlook, investors should monitor several important factors:

• Timing of tariff hikes.

• Regulatory developments.

• Competitive pricing.

• Spectrum acquisition costs.

• Capital expenditure levels.

• Subscriber growth trends.

• Macroeconomic conditions.

Any delay in tariff revisions could temporarily moderate revenue growth expectations.

What Could Drive the Stock Higher?

Several catalysts could support further upside in Bharti Airtel shares:

• Successful tariff hike implementation.

• Strong quarterly earnings.

• Continued ARPU expansion.

• Faster 5G monetisation.

• Broadband subscriber growth.

• Enterprise business expansion.

• Improved free cash flow generation.

• Higher institutional inflows.

These factors collectively strengthen the company's long-term investment case.

Outlook

Bharti Airtel continues to demonstrate strong operational execution across its core telecom and digital businesses. Supported by consistent subscriber additions, improving customer quality, expanding broadband operations and robust growth in enterprise services, the company remains well positioned for sustainable earnings expansion. If the anticipated tariff hike materialises later this year, it could significantly accelerate revenue growth, improve profitability and enhance shareholder returns, making Airtel one of the most attractive long-term opportunities in India's telecom sector.