Synopsis : India’s telecom industry delivered record revenues in FY26 despite no tariff hikes, driven by rising ARPU and subscriber premiumisation. Jefferies believes Bharti Airtel is best positioned to benefit from the sector’s next growth phase, with a potential upside of 27%.
Bharti Airtel Remains Jefferies’ Preferred Telecom Pick
India’s telecom sector is entering a new phase of growth, and global brokerage Jefferies believes Bharti Airtel is among the strongest beneficiaries. The brokerage has maintained its ‘Buy’ rating on Bharti Airtel with a target price of Rs 2,350, indicating a potential upside of nearly 27% from current levels.
According to Jefferies, India’s telecom industry generated a record $32 billion in revenue during FY26, despite the absence of tariff hikes throughout the year. Strong subscriber premiumisation and rising data consumption helped drive growth, while improving industry dynamics have strengthened the outlook for leading operators.
Airtel Led Industry Revenue Growth
Bharti Airtel emerged as the biggest contributor to telecom sector growth in FY26, accounting for nearly 45% of incremental industry revenues.
The company reported 12% revenue growth, supported by a 10% increase in Average Revenue Per User (ARPU). Airtel also gained 60 basis points of revenue market share during the year and registered market share gains across 19 out of 22 telecom circles.
Notably, the company delivered double-digit revenue growth in 14 telecom circles, highlighting the strength of its customer acquisition and premiumisation strategy.
Strong Performance Across Key Markets
Jefferies noted that Bharti Airtel continued to strengthen its position in metro markets, where it gained approximately 2.5 percentage points of market share. The company also expanded its presence across B-circle and C-circle markets, which remain key growth drivers for the industry.
According to the brokerage, nearly 70% of Airtel’s market share gains came from four major markets, with the company further consolidating its leadership position in several regions.
B-Circles and C-Circles Drive Telecom Growth
The report highlighted that B-circles and C-circles collectively account for more than half of India’s telecom revenues and were the primary contributors to industry growth during FY26.
Revenue growth in B-circles stood at 13% year-on-year, while C-circles reported 14% growth. The expansion was driven by a combination of subscriber additions, higher ARPU, and increased adoption of premium plans.
Metro markets recorded relatively modest growth of around 4%, indicating that smaller cities and emerging regions are becoming increasingly important for telecom operators.
Vodafone Idea's Losses Show Signs of Moderation
While Vodafone Idea continued to lose market share during FY26, Jefferies observed that the pace of decline has started to slow.
The company reported 5% revenue growth and a 12% increase in ARPU, although active subscribers declined by 7% during the year.
The brokerage believes that Vodafone Idea’s ongoing network investments and stabilising market share losses could reduce competitive intensity within the sector. This may create favourable conditions for future tariff hikes across the industry.
Telecom Sector Revenue Could Reach $41 Billion
Jefferies remains optimistic about the medium-term outlook for India’s telecom industry.
The brokerage expects sector ARPU to increase from Rs 228 per month in FY26 to approximately Rs 275 by FY28. Assuming a tariff hike of around 15% in December 2026, industry revenues could rise from $32 billion in FY26 to nearly $41 billion by FY28.
Higher ARPU, continued subscriber premiumisation, and growing data consumption are expected to remain key drivers of growth.
Conclusion
Jefferies believes India’s telecom sector is approaching another growth cycle, supported by improving industry structure and the likelihood of future tariff hikes. Among telecom stocks, Bharti Airtel stands out due to its broad-based market share gains, strong revenue growth, and leadership across key circles.
With healthy execution, rising ARPU, and a favourable industry environment, Airtel remains one of the brokerage’s highest-conviction ideas in the Indian telecom space.
Disclaimer : This article is for informational and educational purposes only and should not be considered investment advice. Stock ratings, target prices, and projections are based on brokerage reports and may change without notice. Investors should conduct their own research or consult a SEBI-registered financial advisor before making any investment decisions.
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