4Q results and share swap surprise positively; BUY

Research evidence excerpt

4Q results and share swap surprise positively; BUY

ca: Growth in Homes segment picked up to 37% YoY, led by Share swap transaction surprised positively

healthy subscriber addition (+1.14m), while Arpu continued to decline. Bharti's ongoing FWA Pre Issuance Post Issuance

rollouts should sustain healthy subscriber adds, which, in turn, should support a 26% CAGR Share count (m) 6,094 6,241

in Homes segment revenues/EBITDA over FY26-28. Africa revenues, +22% YoYcc, and Ebitda, Indian Continent Investment 0.9% 3.2%

up 41% YoY, beat estimates. We raise our Africa revenue/ebitda estimates by 5-7% to factor SingtelBharti TelecomStake 40.5%7.5% 39.5%7.3%

in the 4Q beat and favourable Fx movements.

Effective stake 48.9% 50.1%

Strong FCF generation to support higher payouts: Bharti's consol. FCF grew 25% YoY to MittalSingtelFamily 21.4%27.5% 23.2%26.8%

Gap between promoter stakes 6.1% 3.6%Rs499bn in FY26, driven by 24% YoY increase in its CFO despite making c.Rs85bn payment .

towards AGR installment. Healthy FCF along with cash from rights issue resulted in net debt Source: Company data, Jefferies estimates

falling to 1.3x EBITDA. Strong Ebitda growth should drive 16% CAGR in FCF over FY26-29.

Better than expected Share swap terms: Bharti Airtel plans to issue 146.7m shares (2.4% of

share count) at Rs1,923 (7.5% higher than CMP) to Indian Continent Investments (promoters)

in exchange for 16.3% stake in Airtel Africa (also being sold at 11.6% discount to CMP) that this

entity owns. This will not only be earnings-accretive, but will also lower the gap in the stakes

of the Mittal Family and Singtel by 240bps to 3.6%. This could potentially lower the scope for

future stake sales by Singtel.

Maintain Buy: We raise our FY27-28 consol estimates by up to 5% to factor in the 4Q beat and