Crisil upgrades credit ratings for Bharti Airtel and Bharti Telecom

Citing consistent improvements in financial and commercial risk profiles, Crisil Ratings has upgraded the long-term credit ratings of Bharti Airtel and its parent company, Bharti Telecom. This move reflects the telecom group’s strengthened operational performance and increasing market share in India. The rating adjustment was disclosed by Airtel in a stock exchange filing dated 17 July.

Crisil has maintained the short-term and commercial paper ratings at A1+, while upgrading Bharti Airtel’s long-term bank facilities rating from AA+/Positive to AAA/Stable. Bharti Telecom’s commercial paper rating remains at A1+, while its rating for non-convertible debentures has been raised to AAA/Stable.

Strong market position and ARPU growth

According to Crisil, Bharti Airtel's rising revenue market share up approximately 4 percentage points between FY2021 and FY2025, alongside robust growth in average revenue per user (ARPU), supports the improved risk profile. These developments have led to a substantial increase in operating profit and enhanced return metrics. The upgrade takes into account Crisil’s forecast for Airtel’s financial and business risk 

In June 2024, Bharti Airtel implemented broad-based tariff hikes of 17–19%, boosting the ARPU of its Indian mobile services to Rs 245 in FY2025,a 17% year-on-year rise. Crisil expects further ARPU growth in the near to medium term, driven by rising data consumption and customer upgrades to premium plans, especially as 5G services continue to expand.

Crisil anticipates healthy operating profits and a gradual decline in capital expenditure, which should support continued deleveraging.

The telecom operator's capex intensity averaging 25% over the past two fiscal years is projected to decline with the completion of large-scale 5G network rollouts. As the majority of spectrum acquisitions were completed in FY2023, spectrum-related capital expenditure is also expected to reduce.

Acquisitions and investment strategy

To support its nationwide 5G rollout, Bharti Airtel purchased spectrum worth Rs 43,084 crore during the August 2022 auction. In the latest spectrum auction held in June 2024, it acquired spectrum valued at Rs 6,857 crore, primarily for renewing expiring licences.

Capital expenditure for Airtel’s Africa operations is expected to remain steady, with continued investments in spectrum likely in the region.

Diversification and business resilience

Bharti Airtel’s diversified operations, including enterprise services, home broadband, passive infrastructure, and direct-to-home (DTH) services, strengthen its business risk profile. According to Crisil, both the enterprise and home broadband segments have exhibited strong growth in recent years, a trend expected to continue in the short to medium term.

The company’s financial risk profile has also improved, supported by strong earnings growth. Net leverage decreased from 2.5x in FY2024 to 2.1x in FY2025, and increased internal cash flows have allowed Airtel to fund capital expenditures without relying on external borrowing.

As of 31 March 2025, more than 98% of Bharti Airtel’s data subscribers were on 4G or 5G plans. The company has maintained the highest ARPU in the industry over the last two fiscal years and is expected to see further improvement. Continued tariff hikes and rising data consumption are expected to strengthen cash flows over the medium term.

Bharti Telecom’s rating reflects strong promoter support

The upgraded rating for Bharti Airtel’s holding company, Bharti Telecom Ltd (BTL), reflects its sound financial flexibility and healthy market value-to-debt coverage. These are underpinned by the strong backing of its promoters. Singapore Telecommunications Ltd (Singtel) and the Bharti Group.

Expected dividends from Bharti Airtel are considered sufficient to cover BTL’s annual interest obligations, contributing to its enhanced credit profile.

Despite significant debt repayments due in the current fiscal year, BTL faces manageable refinancing risks. The company retains access to capital markets and has a history of successfully refinancing its obligations at competitive rates. However, Crisil notes that exposure to market risks slightly offsets these strengths.