Airtel FY24 annual capex like at Rs 28,000 cr-Rs 31,000 cr: Analysts
Bharti Airtel, India’s second largest telco, is expected to spend up to another Rs 14, 000 crore in capex spending towards 5G rollout and rural 4G expansion, with the spending on this account expected to moderate from FY25 onwards, analysts said.
This will take the annual capex spending by the telco this fiscal year through March 31, 2024, to a range of between Rs 28, 000 crore and Rs 31, 000 crore, they added.
“FY24 is the peak year of capex, as radio capex is high because of considerable 5G rollout as well as rollout of new 4G sites.
The rollout of both 4G and 5G will start moderating from FY25,” analysts from brokerage IIFL said in a report.
Analysts from JP Morgan however said that Airtel needs to catch up with competitor Reliance Jio and defend its market share, implying moderation in capex will be slower than expected.
“Pace of capex moderation beyond FY24 will be slower keeping capex over a two year period high,” they added.
Analysts also said that Airtel is in a good position to see average revenue per user (ARPU) growth over the next few quarters even without a headline tariff hike.
“Even pending the next tariff hike (perhaps mid-CY24E), subscriber mix improvement (2G to 4G, prepaid to postpaid) should continue to drive organic improvement in Bharti’s ARPUs,” Citi Financial analysts said.
They pointed out that the telco’s performance in recent quarters is evidence of its solid execution backed by an effective premiumisation strategy.
“Tariff hikes are likely to be more frequent, going forward, given the consolidated industry structure and higher ARPU requirement for Jio also to justify significant 5G capex,” analysts from JM Financial observed, adding that they expect Airtel to be the biggest
