Motilal Oswal Taps Telecom Giant as Top Large-Cap Pick for 2026: The Path to Earnings Upgrades

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Looking ahead, Motilal Oswal has identified Bharti Airtel as a preferred large-cap stock for 2026, citing expectations of Earnings upgrades for the financial year 2026.

Introduction

The Indian Telecommunications sector, a bedrock of the nation's Digital Transformation, stands at a pivotal juncture. As the world transitions deeper into the 5G era, with its promises of ultra-fast speeds, low latency, and new use cases, the Competitive Landscape in India continues to evolve. Amidst this dynamic environment, Bharti Airtel, a formidable player in both domestic and international markets, has garnered significant attention from Institutional Investors and market analysts. A prominent endorsement recently came from Motilal Oswal Financial Services, a leading Indian Brokerage house, which identified Bharti Airtel as a preferred large-cap stock for 2026. This conviction is rooted in specific expectations of robust earnings upgrades for the financial year 2026, signalling a strong belief in the company's strategic trajectory and its ability to capitalize on unfolding market opportunities. This declaration from a respected financial institution like Motilal Oswal is not merely a transient recommendation; it reflects a deeper analytical assessment of Bharti Airtel’s intrinsic strengths, its market positioning, and the broader macroeconomic and Regulatory tailwinds anticipated to support its Growth. The emphasis on earnings upgrades for FY2026 suggests that analysts foresee a substantial improvement in Profitability metrics, driven by a confluence of factors including potential tariff rationalization, successful 5G Monetization strategies, sustained growth in its enterprise segment, and improved performance from its African operations. Bharti Airtel has consistently demonstrated a commitment to enhancing its network capabilities, expanding its subscriber base, and diversifying its Revenue streams beyond traditional voice and data services. The company's aggressive 5G Rollout, strategic focus on high-value customers, and a burgeoning suite of Digital Services position it favorably to capture a larger share of the burgeoning digital Economy. This article delves into the various facets that underpin Motilal Oswal’s optimistic outlook, examining Bharti Airtel's recent Financial Performance, prevalent market trends, the competitive landscape, regulatory dynamics, and potential risks, to construct a comprehensive understanding of its potential trajectory towards 2026 and beyond.

Recent Financial Performance

Bharti Airtel’s financial performance over the past few years paints a picture of resilient growth and strategic repositioning, particularly within the intensely competitive Indian market. The company has consistently focused on improving its Average Revenue Per User (ARPU), which is a critical metric for profitability in the Telecom industry. For the quarter ending December 2023, Airtel reported an ARPU of approximately ₹208, a significant improvement from previous periods, driven by a combination of subscriber upgrades to 4G/5G, a higher mix of post-paid customers, and incremental tariff adjustments. This upward trend in ARPU is a testament to the company’s ability to attract and retain high-value subscribers, differentiating itself through network quality and service offerings. Revenue Growth has been robust, supported by strong performance across its various segments. The India mobile services segment, which is the largest contributor, has shown healthy Expansion, primarily due to subscriber additions and the aforementioned ARPU improvement. As of late 2023, Airtel’s India mobile subscriber base surpassed 345 million, with a substantial portion being 4G/5G users, indicating a strong data consumption trend. This growth has not been limited to urban centers; Airtel has made significant strides in increasing its rural penetration, recognizing the immense untapped potential in these markets. Beyond mobile services, Airtel Business, the company's Enterprise Solutions arm, has emerged as a significant growth engine. This segment offers a comprehensive suite of services including connectivity, cloud, data centers, cyber security, and IoT solutions to businesses across various sectors. Airtel Business has consistently reported double-digit revenue growth, leveraging Airtel’s robust network Infrastructure and expanding its portfolio of value-added services. For instance, in Q3 FY24, Airtel Business reported a year-on-year revenue growth of over 13%, demonstrating its ability to capture a growing share of the digital transformation spending by Indian enterprises. This segment's higher margins and diversified revenue streams provide a crucial buffer against the cyclical nature of consumer mobile services. Bharti Airtel’s African operations also contribute significantly to its overall financial health, though they introduce an element of currency Volatility. Airtel Africa has shown commendable growth in both revenue and profitability, driven by increased penetration of mobile data and mobile money services across its 14 operating countries. As of late 2023, Airtel Africa served over 147 million customers, with a significant growth in data and mobile money users. While facing macroeconomic headwinds such as currency devaluations in key markets like Nigeria, the underlying operational performance remains strong, reflecting robust demand for digital services across the continent. Capital Expenditure (CAPEX) has remained substantial, particularly with the ongoing 5G network rollout in India. Airtel has committed significant resources to rapidly deploy its 5G network across major cities and towns, aiming for pan-India coverage. While this heavy Investment impacts immediate Free Cash Flow, it is a strategic imperative designed to secure future Market Share, enhance customer experience, and open new avenues for revenue generation, especially in enterprise and IoT applications. The company’s disciplined approach to CAPEX, coupled with a focus on maximizing network efficiency, is crucial for realizing the long-term benefits of these Investments. Furthermore, Airtel’s focus on digital services, including Airtel Payments Bank, Wynk Music, Airtel Xstream, and its advertising platform, Airtel Ads, represents a Strategic Move towards building a comprehensive digital ecosystem. While these ventures are currently smaller contributors to the overall revenue, they hold significant long-term potential for user engagement and monetization, leveraging Airtel's vast Customer Base and data insights. The Payments Bank, in particular, has seen substantial growth in transactions and customer Deposits, playing a crucial role in Financial Inclusion. Overall, Bharti Airtel’s recent financial performance reflects a company that is navigating a complex market with strategic foresight. The consistent improvement in ARPU, strong growth in enterprise solutions, resilient performance in Africa, and disciplined CAPEX deployment for 5G, all point towards a foundation capable of supporting the earnings upgrades projected by Motilal Oswal for FY2026.

Market Trends and Industry Analysis

The Indian telecommunications market is currently characterized by several overarching trends that significantly influence Bharti Airtel’s strategic positioning and future prospects. Firstly, the market has largely consolidated into a duopoly between Bharti Airtel and Reliance Jio, with Vodafone Idea (Vi) struggling financially. This consolidation has created a more rational competitive environment, reducing the intense price wars that plagued the sector for several years. This stability is crucial for all operators to improve profitability and generate sufficient returns on their substantial network investments. The consensus among industry observers is that a significant tariff hike, particularly in the pre-paid segment, is imminent and necessary to move the industry’s ARPU towards sustainable levels, ideally in the range of ₹250-300. Such a hike would directly translate into enhanced revenues and profitability for operators like Airtel. Secondly, the advent and rapid deployment of 5G Technology represent both a significant investment hurdle and a monumental opportunity. Bharti Airtel has been at the forefront of 5G rollout in India, deploying its "Airtel 5G Plus" network across a vast geographical footprint. While the initial phase has focused on upgrading existing subscribers to 5G at no extra cost, thereby enhancing experience and data consumption, the true monetization potential lies in future tariff differentiation, enterprise use cases, and fixed wireless access (FWA). FWA, or home broadband via 5G, offers a compelling alternative to traditional fiber broadband, particularly in underserved areas, and Airtel is strategically positioning itself to capture this market with its "Airtel Xstream AirFiber" offering. The enterprise segment is expected to be a key driver of 5G revenue, with private networks, IoT solutions, and enhanced cloud connectivity offering high-value services to businesses. The gestation period for full 5G monetization is typically 2-3 years, making FY2026 a crucial period for these investments to start yielding substantial returns. Thirdly, data consumption continues its exponential growth trajectory, fueled by increasing smartphone penetration, affordable data plans, and a surge in digital content consumption (OTT platforms, social media, online gaming). This trend necessitates continuous network upgrades and Capacity Expansion, but also offers operators the opportunity to upsell higher-value data packs and drive adoption of supplementary digital services. Airtel's strong brand perception for network quality and Customer Service positions it well to capture premium data users. Fourthly, the enterprise segment remains a high-growth, high-margin area. Indian businesses, across SMEs and large corporations, are rapidly digitalizing their operations, driving demand for secure, reliable, and scalable connectivity solutions, cloud services, data centers, and Cybersecurity. Bharti Airtel’s comprehensive "Airtel Business" portfolio is well-positioned to cater to this evolving demand, leveraging its extensive fiber infrastructure and Partnerships with leading technology providers. This segment provides a crucial diversification from the consumer mobile business, offering more stable and predictable revenue streams. Lastly, the digital ecosystem play is becoming increasingly vital. Telecom operators are transforming into holistic digital service providers, offering a suite of services beyond core connectivity. Airtel has been aggressive in this space with its Payments Bank, content platforms (Wynk Music, Airtel Xstream), and digital advertising platforms. These ventures aim to increase customer stickiness, drive engagement, and open new monetization avenues. The payments bank, in particular, benefits from a vast network of touchpoints and contributes to financial inclusion, aligning with national priorities. In summary, the market trends indicate a move towards healthier industry economics, driven by consolidation and anticipated tariff rationalization. 5G deployment is transitioning from an investment phase to a monetization phase, particularly for enterprise and FWA. Sustained data consumption growth, robust demand from the enterprise segment, and the strategic expansion into a wider digital ecosystem are all powerful tailwinds for Bharti Airtel, aligning with the expectations of strong Earnings Growth for FY2026.

Sentiment Analysis of News Headlines

The prevailing sentiment surrounding Bharti Airtel in recent times, as reflected in various news headlines and market commentary, has largely been positive, marked by a growing sense of optimism regarding its future prospects. Headlines frequently underscore the company's proactive strategies and strong operational execution. For instance, reports highlighting Airtel’s rapid and extensive 5G rollout, often citing "Airtel crosses 10 million 5G unique users milestone" or "Airtel deploys 5G across 5,000 towns and cities," have consistently generated positive sentiment. These headlines emphasize the company's technical prowess and its ability to execute large-scale network deployments efficiently. The narrative here is one of strategic leadership and a strong foundation for Future Growth, implicitly suggesting that early movers in 5G will capture a significant market share and brand loyalty. Another recurring theme in news coverage revolves around the company's improving financial metrics, particularly its Average Revenue Per User (ARPU). Headlines such as "Airtel’s ARPU tops ₹208, signaling strength in premium segment" or "Analysts upbeat on Airtel’s ability to drive ARPU Growth" reflect a positive outlook on the company’s pricing power and its focus on attracting higher-value subscribers. This indicates Market Confidence in Airtel's strategy to move away from mere volume growth towards sustainable, profitable growth, a crucial factor for long-term Shareholder Value. The performance of Airtel Business, the enterprise arm, often garners favorable attention. News stories like "Airtel Business clocks double-digit growth, expanding enterprise solutions" or "Airtel secures major enterprise cloud and cybersecurity contracts" project an image of a diversified and robust revenue stream. This segment is often seen as a stable, high-margin contributor, and its consistent growth performance reassures investors about the company's ability to tap into the burgeoning digital transformation needs of Indian corporations. Sentiment regarding potential tariff hikes is also a significant driver of positive market perception. While operators do not explicitly announce future price increases, market analysts and financial journalists frequently speculate on the inevitability and timing of such moves. Headlines like "Telecom Sector poised for tariff hikes to improve industry ARPU" or "Industry watchers expect major tariff correction post-elections, benefiting Airtel" contribute to a forward-looking positive sentiment. The market perceives that Airtel, alongside Jio, would be the primary beneficiaries of any such industry-wide rationalization, directly leading to enhanced profitability. Furthermore, news concerning regulatory stability and government initiatives often indirectly bolsters confidence in Airtel. For example, reports on "Government initiatives to boost Digital Infrastructure" or "TRAI's focus on ease of doing business for telecom operators" create an environment of reduced regulatory uncertainty, which is always viewed favorably by investors. Conversely, while largely positive, some headlines related to currency fluctuations impacting African operations or intense competitive pressures in specific markets occasionally inject a note of caution. However, these are generally viewed as manageable risks within a broader positive trend. For instance, "Currency headwinds challenge Airtel Africa's profitability despite strong subscriber growth" acknowledge risks but often balance them with underlying operational strengths. In essence, the collective sentiment derived from recent news coverage paints a picture of Bharti Airtel as a forward-thinking, strategically sound company with strong operational execution. The market perceives Airtel as well-positioned to capitalize on the next wave of digital growth in India, driven by 5G, enterprise solutions, and an anticipated rationalization in industry Tariffs. This robust positive sentiment directly aligns with and reinforces the kind of optimistic outlook expressed by institutions like Motilal Oswal for FY2026.

Regulatory and Macro-Economic Factors

Bharti Airtel's trajectory towards 2026 is significantly shaped by a complex interplay of regulatory policies and broader macroeconomic forces, particularly within the Indian context. Understanding these dynamics is crucial for projecting its future performance. **Regulatory Factors (India-Specific):** 1. **Tariff Rationalization and Industry Stability:** The Telecom Regulatory Authority of India (TRAI) plays a critical role in shaping the competitive landscape. While TRAI does not directly fix tariffs, its stance on interconnection usage charges (IUC), quality of service (QoS) norms, and other policy interventions indirectly influence pricing strategies. The current environment, with the struggles of Vodafone Idea, has led to a de facto duopoly. Any regulatory measures that promote financial health and Sustainability for the remaining operators, or even simply maintain the current competitive structure without disruptive interventions, are beneficial for Airtel. The market widely anticipates that TRAI will allow for market-led tariff rationalization, recognizing the need for operators to recoup their substantial 5G CAPEX and improve returns on investment. This regulatory forbearance on pricing, rather than intervention, is a key positive factor. 2. **Spectrum Policy and Auctions:** Access to adequate and affordable spectrum is the lifeblood of telecom operations. The government’s approach to spectrum auctions – including pricing, band availability, and payment terms – directly impacts operators' CAPEX and debt levels. Future spectrum auctions, especially for sub-GHz bands for rural coverage and millimeter-wave for high-capacity 5G, will be critical. A predictable and reasonable spectrum policy allows operators like Airtel to plan their network expansions and capacity upgrades effectively without undue financial strain. Historically, India has seen high spectrum prices, making future auctions a point of attention. 3. **Adjusted Gross Revenue (AGR) Definition:** The lingering issue of the AGR definition, though largely settled for past dues through staggered payments, has been a significant regulatory overhang. Any future clarity or modifications to how non-telecom revenues are treated in AGR calculations could have long-term implications for the industry's financial health. A stable and equitable definition prevents sudden financial shocks. 4. **Digital India and BharatNet Initiatives:** Government programs aimed at boosting digital penetration, such as Digital India and the BharatNet project (providing broadband connectivity to rural areas), create a demand-side tailwind for telecom operators. These initiatives drive smartphone adoption, increase data consumption, and expand the addressable market for services like mobile internet, Digital Payments, and e-governance, directly benefiting Airtel's subscriber growth and ARPU. 5. **Data Protection and Privacy Regulations:** As India moves towards a comprehensive data protection framework, regulations concerning data localization, user privacy, and cybersecurity will impact how telecom companies manage customer data and offer digital services. While Compliance will entail costs, strong regulations can also foster greater trust in digital services, potentially boosting adoption rates for Airtel’s digital offerings. **Macro-Economic Factors:** 1. **Economic Growth and Disposable Income:** India’s robust GDP Growth trajectory is a fundamental driver for the telecom sector. A growing economy translates into higher disposable incomes, which in turn leads to increased spending on premium telecom services, faster migration to 4G/5G, and greater adoption of value-added services. Sustained economic expansion provides a fertile ground for ARPU enhancement and subscriber upgrades. 2. **Inflation and Interest Rates:** High inflation can impact operational costs (e.g., energy, equipment imports) and Consumer Spending power. Similarly, rising interest rates increase the cost of debt for heavily capitalized sectors like telecom. With substantial debt on its books from network investments and spectrum purchases, Airtel is sensitive to Interest Rate movements. A stable or declining interest rate environment would ease financial leverage. 3. **Currency Volatility (African Operations):** Bharti Airtel's significant operations in Africa expose it to currency fluctuations. Devaluations of African currencies against the US dollar can negatively impact reported revenues and profits when converted to Indian Rupees, despite strong local currency performance. Geopolitical stability in its operating African markets is also a critical, albeit unpredictable, factor. 4. **Urbanization and Digital Literacy:** Ongoing urbanization in India fuels demand for high-speed internet and digital services. Simultaneously, improving digital literacy, often driven by government and private sector initiatives, expands the base of internet users, driving consumption of data and digital content. 5. **Global Economic Trends:** While India remains relatively resilient, global economic slowdowns could indirectly impact foreign direct investment (FDI) into the telecom sector, though domestic investments remain strong. Furthermore, Supply Chain Disruptions, as seen during the pandemic, can affect equipment procurement and network rollout timelines. In conclusion, a stable and rational regulatory environment, coupled with India’s strong Macroeconomic Fundamentals, forms a robust foundation for Bharti Airtel’s future. The expectation of tariff hikes, a stable competitive landscape, and ongoing digital transformation initiatives are powerful tailwinds, while careful management of spectrum costs, debt, and international currency risks remains paramount. Motilal Oswal's positive outlook for FY2026 implicitly factors in an anticipation of these macro-regulatory dynamics largely aligning favorably for Airtel.

Risk Factors

While the outlook for Bharti Airtel appears robust, particularly in light of Motilal Oswal’s projections for FY2026, it is imperative to acknowledge and analyze the inherent risk factors that could potentially impede its growth trajectory or impact profitability. A comprehensive understanding of these risks is crucial for a balanced perspective. 1. **Intensified Competition:** Despite the current duopoly dynamic, competition remains fierce, primarily from Reliance Jio. While the era of disruptive pricing might be behind us, Jio's aggressive strategies in 5G rollout, enterprise solutions, and digital services could still pressure ARPU and market share. Any significant re-entry or resurgence from Vodafone Idea (Vi), although currently unlikely, or the entry of a new disruptive player, could reignite price wars, directly impacting Airtel's profitability. Maintaining a competitive edge in network quality, customer service, and innovative offerings is an ongoing challenge. 2. **Regulatory Interventions:** While a stable regulatory environment is anticipated, unforeseen policy changes or interventions from TRAI or the government could pose significant risks. This could include unfavorable decisions on spectrum pricing in future auctions, changes in license fee or Universal Service Obligation (USO) fund contributions, or new mandates regarding quality of service that necessitate additional CAPEX. Historically, the Indian Telecom sector has been prone to regulatory shifts that have had profound financial implications for operators. 3. **Technology Obsolescence and Rapid Innovation:** The telecom sector is characterized by rapid technological advancements. While 5G is the current frontier, the eventual evolution to 6G and other future technologies requires continuous investment in R&D and network upgrades. Failing to adapt quickly or making significant investments in technologies that become obsolete could lead to stranded assets or a loss of competitive advantage. The ability to monetize new technologies quickly is paramount to justify investment cycles. 4. **High Capital Expenditure and Debt Burden:** The deployment of nationwide 5G networks, ongoing fiber expansion, and upgrades to existing infrastructure demand substantial capital expenditure. Bharti Airtel has already invested heavily and will continue to do so. This heavy CAPEX naturally leads to a considerable debt burden. While the company has shown discipline in managing its debt, any adverse shifts in interest rates, credit markets, or cash flow generation could make debt servicing more challenging, potentially diverting funds from other strategic initiatives or shareholder returns. 5. **Macroeconomic Headwinds and Currency Risks in Africa:** Airtel Africa contributes significantly to the company's overall revenue and profits, but its operations are exposed to the macroeconomic volatility of various African nations. Currency devaluations (e.g., Nigerian Naira, Kenyan Shilling) against the US dollar can significantly erode reported earnings in INR, despite strong local currency performance. Furthermore, political instability, regulatory changes in African markets, or unforeseen economic downturns in key regions could negatively impact subscriber growth, ARPU, and overall profitability from the continent. 6. **Cybersecurity Risks and Data Breaches:** As a provider of critical communication infrastructure and a growing suite of digital services (including Banking), Airtel handles vast amounts of sensitive customer data. The threat of cyberattacks, data breaches, or network security failures is a Persistent and growing risk. A significant breach could lead to severe reputational damage, regulatory penalties, and a loss of customer trust, impacting subscriber retention and Brand Value. 7. **Supply Chain Disruptions:** The global nature of telecom equipment Manufacturing exposes operators to supply chain risks. Geopolitical tensions, trade disputes, or events like pandemics can disrupt the availability of critical network components, leading to delays in network deployment, increased costs, and potential service disruptions. Dependence on a limited number of global vendors also introduces concentration risk. 8. **Talent Acquisition and Retention:** The specialized nature of telecom technology and the demands of digital transformation require a highly skilled workforce. Competition for talent in areas like AI, cybersecurity, network engineering, and data analytics is intense. Failure to attract, retain, and continuously upskill its workforce could hinder Airtel's ability to innovate, manage complex networks, and deliver cutting-edge services. These risk factors underscore that while the path ahead for Bharti Airtel appears promising, it is not without its challenges. The company's ability to effectively mitigate these risks through strategic planning, operational excellence, and prudent Financial Management will be critical to realizing the full potential envisioned by analysts for FY2026.

Future Outlook

The future outlook for Bharti Airtel, particularly as it pertains to Motilal Oswal's projection of earnings upgrades for FY2026, is built upon a compelling narrative of strategic execution, market consolidation, and digital transformation. Several key pillars are expected to drive this anticipated growth and enhanced profitability. Firstly, and perhaps most crucially, is the expectation of **tariff rationalization in the Indian mobile segment**. The current ARPU levels, while improving, are still considered unsustainable for the enormous capital expenditures incurred by operators. Industry analysts widely anticipate a significant tariff hike, potentially post-elections, to bring ARPU closer to the ₹250-300 range. For a company with over 345 million subscribers, even a modest increase of ₹20-30 in ARPU translates into billions of rupees in additional revenue and disproportionately higher operating Profit due to the high operating leverage of telecom networks. FY2026 provides ample time for these hikes to fully reflect in the company’s financials. Secondly, the **monetization of 5G investments** will accelerate. While the initial phase focused on rapid rollout and enhancing customer experience, the medium-term strategy involves generating new revenue streams. This will primarily come from two avenues: * **Premium consumer services**: Differentiated 5G plans for higher speeds and specific use cases, or bundling with exclusive content, could emerge. * **Enterprise and fixed wireless access (FWA)**: 5G-driven private networks, IoT solutions, edge computing, and high-speed home broadband (Airtel Xstream AirFiber) are high-growth, high-margin opportunities. The enterprise segment, especially, is poised for explosive growth as Indian businesses embrace digitalization, and Airtel Business is strategically positioned to capture a significant share of this market. By FY2026, the scaling of these new 5G-enabled services should contribute materially to earnings. Thirdly, **sustained growth in the Airtel Business segment** is a powerful, low-volatility earnings driver. As India's economy grows and enterprises accelerate their digital transformation journeys, demand for managed connectivity, cloud services, data centers, cybersecurity, and IoT solutions will continue to surge. Airtel's comprehensive portfolio and strong client relationships position it as a preferred partner for businesses, providing a diversified and high-margin revenue stream that acts as a hedge against potential volatility in the consumer segment. Fourthly, **improved performance and stability in African operations**. While exposed to currency risks, Airtel Africa has demonstrated strong underlying operational growth, driven by increasing smartphone penetration, expanding data usage, and the burgeoning mobile money ecosystem. Strategic investments in network expansion and digital services across key African markets are expected to continue yielding positive results, contributing to the overall consolidated earnings growth. Ongoing efforts to streamline operations and enhance efficiency will also contribute to better profitability. Finally, the **deepening of Airtel’s digital ecosystem** will contribute to enhanced customer stickiness and new monetization opportunities. Platforms like Airtel Payments Bank, Wynk Music, Airtel Xstream, and Airtel Ads are not merely add-ons but strategic initiatives to capture a larger share of the customer's digital wallet and time. As these platforms mature and expand their user base, their contribution to consolidated revenues and, more importantly, customer lifetime value, will grow. The current industry structure, characterized by reduced competitive intensity between the two primary private players, creates a more favorable environment for pricing power and Investment Returns. This stability, combined with Airtel’s relentless focus on network quality, customer experience, and diversified revenue streams, underpins the confidence in substantial earnings upgrades. FY2026 is an appropriate timeline, allowing for the full realization of 5G monetization, the impact of potential tariff hikes, and the sustained growth of its enterprise and digital offerings to fully manifest in the financial statements. This holistic view strengthens the conviction that Bharti Airtel is well-poised to deliver superior financial performance in the medium term.

Recommendations

Given the comprehensive Analysis of Bharti Airtel’s strengths, market positioning, and the anticipated tailwinds, alongside the critical endorsement from Motilal Oswal for FY2026, a clear set of strategic recommendations emerges. These recommendations are aimed at capitalizing on the identified opportunities and reinforcing the company's trajectory towards sustained earnings growth and enhanced shareholder value. **For Bharti Airtel (Strategic Priorities):** 1. **Execute a Disciplined Tariff Rationalization Strategy:** While awaiting industry-wide tariff hikes, Airtel should continue to focus on "quality over quantity" in its subscriber base. This involves upselling higher-value plans, promoting 4G/5G upgrades, and exploring segmented pricing strategies that reward loyalty and data consumption. When industry-wide tariff increases materialize, Airtel must execute these increases judiciously to maximize ARPU growth while minimizing subscriber churn, leveraging its strong network quality and brand perception. 2. **Accelerate 5G Monetization Beyond Connectivity:** The significant investment in 5G must translate into clear revenue streams beyond just faster mobile data. Airtel should intensify its focus on: * **Enterprise 5G Solutions:** Develop and market tailored private networks, edge computing, and IoT solutions for specific industry verticals (e.g., manufacturing, Logistics, Healthcare). Deep partnerships with technology providers and system integrators will be crucial here. * **Fixed Wireless Access (FWA):** Aggressively expand its "Airtel Xstream AirFiber" footprint, particularly in areas underserved by fiber, positioning it as a compelling alternative for home broadband. * **Innovation & Ecosystem Development:** Invest in developing new 5G-enabled applications and services, potentially through incubators or partnerships, to showcase the full potential of the technology. 3. **Strengthen Airtel Business Portfolio and Market Penetration:** Continue to expand the offerings of Airtel Business, focusing on high-growth areas like cybersecurity, managed cloud services, and data center solutions. Increased investment in Sales and support infrastructure for enterprise clients, particularly SMEs, can unlock significant untapped potential. This segment's stability and higher margins are invaluable. 4. **Optimize African Operations for Sustainable Growth:** While managing currency volatility is challenging, Airtel should continue to focus on operational efficiencies, expanding its data and mobile money services, and exploring local currency financing options to mitigate foreign exchange risks where possible. Strategic partnerships or divestments in non-core assets could also be considered to streamline operations and enhance profitability. 5. **Expand and Deepen the Digital Ecosystem:** Continue to integrate and enhance the value proposition of Airtel Payments Bank, Wynk Music, Airtel Xstream, and other digital platforms. Focus on cross-selling and upselling between these services to increase customer engagement, reduce churn, and create new monetization avenues (e.g., advertising, financial products). Data analytics should be leveraged to personalize offerings. 6. **Prudent Capital Allocation and Debt Management:** With substantial CAPEX already deployed for 5G, the focus should shift towards optimizing returns on these investments. Maintaining disciplined CAPEX, focusing on efficiency, and actively managing debt levels to improve leverage ratios will be critical to enhancing shareholder returns and financial flexibility. **For Investors (Investment Thesis Reinforcement):** 1. **Long-Term Horizon:** Motilal Oswal's 2026 outlook underscores that Bharti Airtel is a medium-to-long-term investment proposition. Investors should adopt a patient approach, allowing time for 5G monetization and tariff rationalization to fully impact earnings. 2. **Focus on ARPU and Enterprise Growth:** Investors should closely monitor ARPU trends, not just subscriber additions. The growth in Airtel Business revenue and its contribution to the overall bottom line will be a key indicator of diversified and stable growth. 3. **Valuation Re-rating Potential:** As the company transitions from a CAPEX-heavy investment phase to a monetization phase, with improved free cash flow and profitability, there is potential for a re-rating of its valuation multiples, aligning with more stable, high-growth infrastructure plays. By diligently pursuing these strategic imperatives, Bharti Airtel is well-positioned to not only meet but potentially exceed the optimistic earnings expectations set by institutions like Motilal Oswal for FY2026, solidifying its standing as a preferred large-cap investment in the evolving Indian digital landscape.