Indus contributions, stronger Africa biz to boost Airtel cash flows in FY26: S&P Global
Bharti Airtel
is likely to report higher cash flows in FY26, on the back of earnings contribution from its towers unit, Indus, and strong operating performance of its Africa business, international ratings agency, S&P Global said Wednesday.
As per company data, Bharti
Airtel
's cash & cash equivalents in FY25 stood at ₹10,653.1 crore.
The global ratings agency expects Airtel's rising earnings to strengthen its ratio of funds from operations (FFO) to debt to over 30% in the next 12-24 months. It, though, added that the telco would need to maintain the ratio at well above 30% to ensure a higher standalone credit profile (SACP).
'The consolidation of telecom tower subsidiary,
Indus Towers
, and the full-year impact of the last round of mobile rate hikes will underpin Airtel's rising earnings in FY26, and further support will come from stabilising forex rates and the underlying strength in the operating performance of the company's Africa operations,' S&P Global said in an official statement.
Airtel shares were up 0.58% to ₹1819 in Wednesday mid-morning trade on the BSE.
Airtel Africa
had recently reported an $80 million net profit in the March quarter — compared with a $91 million net loss a year back — while its quarterly revenue had risen 18 % on-year to $1.31 billion on the back of tariff adjustments in the key Nigeria market and easing of currency headwinds.
S&P Global estimates Airtel's adjusted Ebitda in FY26 will rise 14-16% to ₹110 crore (INR 1.1 bn).
Earlier this month, Airtel posted a five-fold jump in its fourth-quarter net profit, boosted by a tax benefit and strong subscriber additions in its India mobile broadband business.
Analysts expect the country's second-largest telco to deliver stronger results with strong operating margins in coming quarters, benefitting from earlier investments in strengthening its 4G network and 5G rollout, and a likely moderation in mobile capex spends.
S&P Global, though, said it would increasingly consider the rising debt of Bharti Telecom Ltd (BTL) - the main promoter-level controlling company of Airtel - in its analysis of the Sunil Mittal-led telco's creditworthiness, going forward.
'Higher debt at Bharti Telecom carries the risk of the company depending on dividends from Airtel to service its debt. This is since Airtel is BTL's largest asset,' S&P Global said.
The global ratings agency estimates BTL's net debt at ₹40,000 crore as of March 31, 2025, which is about 16% of Airtel's adjusted debt on the same date. 'This is up from (BTL's) ₹25,000 crore at the end of FY24.'
In recent years, Singtel and the Mittal family — the co-promoters of Bharti Airtel — have been shifting their direct holdings in Airtel to BTL, which has been funding such deals via debt. Consequently, BTL's debt levels have increased because of its rising stake in Airtel. BTL's stake in Airtel is now at 40.47%.
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