Bharti Airtel is scheduled to release its Q1FY26 earnings on August 5, and analysts expect the telecom major to report resilient topline growth but a drop in sequential profitability, weighed down by margin pressure in Africa, muted gains in India mobile ARPU, and a continued clean-up in the enterprise segment.

According to a source poll of brokerages, Bharti’s consolidated revenue is likely to come in between Rs 49,200 crore and Rs 49,400 crore, registering 2.5 to 3.2% growth QoQ and nearly 28% growth YoY. However, net profit estimates vary sharply, with UBS forecasting just Rs 563 crore, while BofA Securities pegs it at a steep Rs 7,690 crore.

Earnings estimates of analysts polled by a source are in a narrow range, so any positive or negative surprises may elicit a sharp reaction in the stock.

Earnings estimates for Bharti Airtel’s Q1FY26 reflect strong year-on-year growth but reveal a wide divergence on net profit forecasts, indicating uncertainty around operating leverage and regional performance. While PAT projections range from Rs 5,636 crore (UBS) to Rs 11,904 crore (JM Financial), the consensus midpoint suggests a possible QoQ decline from Rs 12,470 crore in Q4FY25, largely due to base effects and margin pressures in Africa and enterprise.

Revenue estimates are more consistent, ranging between Rs 48,950 crore and Rs 49,583 crore, implying a QoQ growth of 2.2 to 3.2% and a YoY rise of over 28% from Rs 38,506 crore in Q1FY25. On profitability, EBITDA margin estimates range between 56.4% and 57.3%, steady versus 56.4% in Q4FY25, suggesting limited room for operating leverage despite improving subscriber and ARPU metrics.

What’s driving Bharti’s Q1 performance

The Q1 performance is expected to reflect Bharti’s inherent business stability, supported by continued postpaid traction, broadband subscriber additions, and marginal ARPU gains. However, this is being offset by normalising tailwinds from previous tariff hikes, Africa’s FX volatility, and transition pains in enterprise.

BofA expects Bharti to report a stable quarter with modest QoQ revenue growth and flattish margins, with subscriber additions and home broadband helping offset enterprise drag, maintaining a Buy rating with a target of Rs 2,100.

UBS, which recently downgraded Bharti to ‘Sell’, flagged high valuation risks (13x FY27E EV/EBITDA) and warned that tariff hikes may be delayed, especially in lower-end plans.

Slower ARPU growth, but subscriber traction remains intact

Bharti’s ARPU is expected to rise 1.6 to 1.7% QoQ to Rs 249, compared to a 2.5% jump in Q4. UBS models 2% mobile revenue growth QoQ, aided by 3 million net subscriber additions. JM Financial estimates 5.5 million mobile broadband subscriber additions, though overall net additions could slow to 2.3 million (vs. 6.6 million in Q4).

Africa business margin compression

The Africa segment contributed ~Rs 13,000 crore in Q4 revenue but faces currency depreciation, cost inflation, and seasonal weakness. Axis Securities expects consolidated PAT to decline 40.3% QoQ, partially attributing it to weaker Africa performance.

Enterprise business under restructuring

Bharti continues to exit low-margin wholesale voice contracts, which has reduced scale but improved quality of earnings. JM Financial expects enterprise EBITDA to decline 12% QoQ on a 3% revenue dip.

No tariff hike yet; margin expansion limited

Despite industry expectations, no fresh tariff hikes were taken in Q1, capping operating leverage. BofA and UBS both model flat EBITDA margins at ~56.4%, noting that most Q1 growth is volume-driven rather than pricing-led.

Key things to watch in Q1FY26 earnings

ARPU trajectory: Will Bharti sustain its premium ARPU lead over Jio, or has pricing momentum peaked?

Update on tariff hike roadmap: Especially after TRAI's floor price consultations and the July 2024 revision effects have faded.

Africa FX and cost commentary: Management’s outlook on margin protection in key African markets will be watched.

Enterprise strategy evolution: Whether Bharti gives clarity on when the transition from legacy voice will bottom out.

Indus Towers stake monetisation: Any update on Bharti's plan to sell its remaining stake could materially impact FCF outlook.