Airtel’s Dividend Likely To Rise Over 100% In FY25, Says HSBC Global Research Ananya Chaudhuri NDTV Profit

HSBC Global Research raised forecast for the dividend payment from Bharti Airtel Ltd because of free cash flow outlook improvement and rising cash flow needs at the promoter entity, Bharti Telecom Ltd. The brokerage sees it increasing 114% to 17 per share in the financial year 2025.

In three years, Bharti Airtel’s dividend payment will likely quadruple to Rs 34 per share in financial year 2027, HSBC Global Research said in a note on Tuesday. Its dividend forecast is 44% higher than the consensus estimate.

Rising cash flow need of the promoter Bharti Telecom Ltd. due to rise in debt is one of the reasons behind HSBC Global Research’s high estimates for dividend payment. Bharti Telecom owns 40.33% stake in Bharti Airtel.

Bharti Telecom’s interest expense will increase to Rs 3,200 crore in financial year 2026 as debt rose recently after it increased stakes in Bharti Airtel during November 2024. If assumed dividend payment is taking place by FY25 end, it will cover finance cost of Bharti Telecom in the next financial year. It implied Bharti Airtel’s total dividend payment will rise to Rs 9,900 crore, which means the company will pay 17.1 per share for its fully paid-up shares in financial year 2025.

“We forecast DPS will rise by 33% year on year to Rs 22.7 in FY26 estimate and 50% year on year to Rs 34.1 in FY27e. Our dividend forecasts for FY26e-27e are higher than consensus estimates by 28-45%,” HSBC Global Research said.

Bharti Airtel’s FCF outlook is improving and leverage reaching comfortable levels in India business, according to HSBC Global Research.

HSBC Global Research kept ‘Buy’ rating for Bharti Airtel along with Rs 1,940 target price. The brokerage believes the telecom company is well positioned for return on invested capital improvement driven by margin expansion and improving invested capital turnover.

Bharti Airtel’s average revenue per user will likely rise because of tariff hike in financial year 2027, subscriber migration to higher data plans due to higher data usage, and gains in high-value post-paid subs. “We forecast mobile ARPU to reach Rs 301 by FY27e (unchanged).”

Bharti Airtel’s consolidated Ebitda will likely increase at a rate of 15% compound annual growth rate and earning per share will rise at a CAGR of 75%, according to HSBC Global Research.

. Read more on Markets by NDTV Profit.HSBC Global Research kept ‘Buy’ rating for Bharti Airtel along with Rs 1,940 target price.  Read MoreMarkets, Business, Notifications 

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