Crisil Ratings has upgraded its rating of Bharti Airtel and its holding company, Bharti Telecom, citing an improved financial profile and a consistently rising revenue market share for India’s second-largest telecom operator.
The ratings agency raised its rating on Bharti Airtel’s long-term bank facilities to AAA/Stable from AA+/Positive, while reaffirming the short-term and commercial paper rating at A1+.
The upgrade reflects an improvement in both the business and financial risk profiles of the company during FY25, in line with Crisil’s expectations, the agency said in a statement on Friday.
Crisil also upgraded the rating on the non-convertible debentures of Bharti Telecom — part of the Bharti Group — to AAA/Stable from AA+/Positive, and reaffirmed the A1+ rating on its commercial paper.
Bharti Airtel shares closed 1.5% lower at ₹1,901.05 on the BSE on Friday.
According to Crisil, the improvement in Airtel’s business risk profile is supported by a nearly 4 percentage point increase in its domestic mobile revenue market share between FY21 and FY25, along with healthy growth in average revenue per user (ARPU). This has driven strong operating profit growth and improved return metrics.
Over the near to medium term, Crisil expects continued strong operating profits and reduced capex needs to support steady deleveraging.
Segments such as home broadband and enterprise have shown healthy growth in recent years, and Crisil expects this momentum to continue.
The telco’s improved financial risk profile has been led by a reduction in net leverage — from 2.5 times in FY24 to 2.1 times in FY25 — driven by strong earnings. Better cash flows have also enabled Airtel to fund its capex entirely through internal accruals, with no reliance on external debt.
Capex intensity, which averaged 25% over the past two fiscal years, is expected to moderate in the medium term as mass 5G rollout is largely complete. Spectrum-related capex is also likely to ease, given that most purchases were completed in FY23.
“A higher-than-expected outgo for network rollout or spectrum acquisition — along with any major debt-funded acquisitions — will remain key monitorables,” Crisil said.
For Bharti Telecom, the upgraded rating reflects its strong market value-to-debt cover and robust financial flexibility, backed by the Bharti Group’s promoter strength and reputation.
Crisil noted that expected dividend inflows from Bharti Airtel are sufficient to meet Bharti Telecom’s annual interest obligations.
“While BTL (Bharti Telecom Ltd) is exposed to refinancing risks due to significant repayments scheduled in the current fiscal, the company has access to capital markets and a strong track record of refinancing debt at competitive rates. These strengths are partially offset by exposure to market risk,” Crisil said.
The ratings agency raised its rating on Bharti Airtel’s long-term bank facilities to AAA/Stable from AA+/Positive, while reaffirming the short-term and commercial paper rating at A1+.
The upgrade reflects an improvement in both the business and financial risk profiles of the company during FY25, in line with Crisil’s expectations, the agency said in a statement on Friday.
Crisil also upgraded the rating on the non-convertible debentures of Bharti Telecom — part of the Bharti Group — to AAA/Stable from AA+/Positive, and reaffirmed the A1+ rating on its commercial paper.
Bharti Airtel shares closed 1.5% lower at ₹1,901.05 on the BSE on Friday.
According to Crisil, the improvement in Airtel’s business risk profile is supported by a nearly 4 percentage point increase in its domestic mobile revenue market share between FY21 and FY25, along with healthy growth in average revenue per user (ARPU). This has driven strong operating profit growth and improved return metrics.
Over the near to medium term, Crisil expects continued strong operating profits and reduced capex needs to support steady deleveraging.
Segments such as home broadband and enterprise have shown healthy growth in recent years, and Crisil expects this momentum to continue.
The telco’s improved financial risk profile has been led by a reduction in net leverage — from 2.5 times in FY24 to 2.1 times in FY25 — driven by strong earnings. Better cash flows have also enabled Airtel to fund its capex entirely through internal accruals, with no reliance on external debt.
Capex intensity, which averaged 25% over the past two fiscal years, is expected to moderate in the medium term as mass 5G rollout is largely complete. Spectrum-related capex is also likely to ease, given that most purchases were completed in FY23.
“A higher-than-expected outgo for network rollout or spectrum acquisition — along with any major debt-funded acquisitions — will remain key monitorables,” Crisil said.
For Bharti Telecom, the upgraded rating reflects its strong market value-to-debt cover and robust financial flexibility, backed by the Bharti Group’s promoter strength and reputation.
Crisil noted that expected dividend inflows from Bharti Airtel are sufficient to meet Bharti Telecom’s annual interest obligations.
“While BTL (Bharti Telecom Ltd) is exposed to refinancing risks due to significant repayments scheduled in the current fiscal, the company has access to capital markets and a strong track record of refinancing debt at competitive rates. These strengths are partially offset by exposure to market risk,” Crisil said.
