Summary:
S&P Global Ratings has upgraded Bharti Airtel’s long-term credit rating to BBB, reflecting strong earnings growth, rising ARPU, and improving cash flows. Airtel’s solid market position, tariff hikes, and steady subscriber additions are expected to further strengthen its financial profile over the next two years.
S&P Global Ratings has raised Bharti Airtel’s long-term issuer credit rating to BBB, signaling the company’s growing financial strength and strong operational performance. In simple terms, the upgrade reflects Airtel’s robust earnings, rising ARPU of ₹256 in Q2 FY26, and consistent cash flow momentum, all of which solidify its position as India’s second-largest telecom operator. This directly answers the central question: Airtel’s upgraded rating is driven by its stronger financials and expanding market share.
S&P’s report notes several key factors behind this improvement. The successful tariff hikes of July 2024, stable three-player market (Airtel, Jio, Vi), and rational industry competition that supports sustained ARPU growth. The agency expects India earnings to rise through 2–4% annual subscriber additions and 6–8% ARPU growth over the next two years. Airtel’s operations in Africa will remain important as well, contributing nearly 20% of consolidated earnings, supported by a growing customer base and healthy ARPU trends.
Financially, Airtel is projected to become even stronger. S&P estimates that the operator’s FFO-to-debt ratio will increase to 37–40% in FY26 and above 45% in FY27, compared to 27.5% in FY25. This improvement shows that Airtel is generating more cash relative to its debt, giving it greater financial flexibility.
However, the agency also flagged a risk of rising debt levels at Bharti Telecom Ltd, Airtel’s parent company. While this does not change Airtel’s positive outlook, S&P will continue to monitor the situation. If Airtel maintains its deleveraging path and follows a conservative capital strategy, it could receive an even higher rating within 12–24 months.
