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Strong quarter; 5% beat on both revenue and EBITDA.

Healthy double-digit growth continues across segments and geographies

* Airtel Africa (AAF)’s constant currency (CC) revenue at USD1.4b continued to grow in healthy double digits (+25% YoY vs. +23% YoY in 4Q), driven by acceleration in data (+38% YoY) boosted by tariff hike flow through in Nigeria, and robust growth in Mobile Money revenue (+30% YoY).

* The company’s reported revenue came in at USD1.42b (+7% QoQ), ~5% ahead of our estimate, driven by better performance in Francophone Africa (8% beat) and Nigeria (2% beat).

* AAF’s CC EBITDA at USD674m also continued double-digit growth (+33% YoY vs. 26% YoY in 4QFY25). Reported EBITDA at USD673m (+12% QoQ, +31% YoY) came in ~5% ahead of our estimate.

* Reported EBITDA margin expanded ~190bp QoQ to 47.6% (+300bp YoY) and was 20bp above our estimate, driven by a sharp margin expansion in Nigeria.

* With capex declining ~18% YoY to USD121m, 1QFY26 operating FCF improved 53% YoY to USD553m in CC terms.

* Net debt increased further to USD5.5b (from USD5.36b at the end of FY25). Excluding leases, net debt inched up to USD1.72b (from USD1.7b QoQ).

* Reported leverage moderated to 2.2x (vs. 2.3x QoQ). Excluding leases, net debt to EBITDAaL stood at ~0.9x (vs. 1x QoQ).

Robust double-digit YoY growth in CC terms across offerings

* Mobile services revenue at USD1.2b (+7% QoQ) continued to report doubledigit YoY CC growth (+24% YoY, versus 22% YoY in 4Q), with robust growth across both voice (+14% YoY) and data (+38% YoY).

* Mobile services EBITDA at USD558m (+8% QoQ) was up 31% YoY (vs. 24% YoY in 4Q), in CC, as margins expanded 50bp QoQ to 46.8%.

* Mobile Money revenue at USD290m (+10% QoQ) rose 30% CC YoY (vs. 30% YoY in 4Q), led by 16% YoY subscriber growth, and an 11% YoY CC rise in ARPU.

* Mobile money EBITDA at USD153m (+12% QoQ) grew +28% CC YoY (vs. 29% YoY in 4Q) with EBITDA margin expanding 60bp QoQ to 52.7%.

Growth accelerates in Nigeria and Francophone Africa

* Nigeria: Nigeria CC revenue growth accelerated to 49% YoY (vs. 40% YoY in 4Q), driven by the benefits of the tariff hike. Data revenue grew 60% YoY (vs. 45% YoY in 4QFY25), and voice revenue growth accelerated to ~37% YoY (from ~31% YoY in 4QFY25). Reported revenue grew 30% YoY (2% ahead). CC EBITDA was up 73% YoY as margin expanded 300bp QoQ to 55.6% (up 780bp YoY, 280bp ahead of our estimate).

* East Africa: East Africa CC revenue growth remained robust at 20% YoY (vs. 21% YoY in 4Q) on account of strong 21% YoY growth in data and 30% YoY growth in Mobile Money. Reported revenue grew 21% YoY (~4% ahead). EBITDA was up ~19% YoY in CC as margin contracted 80bp QoQ to 51.9% (- 30bp YoY, 80bp below).

* Francophone Africa: Growth improved further in Francophone Africa with CC revenue up 16% YoY (vs. 14% YoY in 4Q), driven by 42% YoY CC data revenue growth (+35% YoY in 4Q). Reported revenue grew 19% YoY (8% ahead). EBITDA was up 23% YoY (vs. ~17% YoY increase in 4Q) in CC terms as margin improved ~240bp YoY to 44.2% (albeit 20bp lower QoQ, 30bp miss).

Robust operating performance underpinned by strong ARPU growth, data consumption, and steady net adds

* The subscriber base inched up 3.3m QoQ (vs. 3m net adds in 4Q) to 169.4m (+9% YoY).

* Data subs rose by 2.2m QoQ (vs. 2m net adds in 4Q) to 735.6m (+17% YoY, 44.6% of subs now opting for data).

* Mobile money subs grew by 1.2m QoQ (vs. 0.3m in 4Q) to 45.8m (16% YoY).

* Blended ARPU was up 4.4% QoQ at USD2.4 (+14.5% YoY CC growth), driven by a robust ~19% YoY CC growth in Data ARPU and ~11% YoY CC growth in Mobile Money ARPU.

* Data usage per sub grew ~8% QoQ to 7.8GB/month (up ~27% YoY vs. 6.2GB/month YoY). Voice usage per customer declined ~1% QoQ to 294min/month (up ~1% YoY vs. 290 min YoY).

Consistent performance and a long runway for growth to drive further rerating

AAF continues to deliver double-digit CC revenue and EBITDA growth for the past several years. Despite ~70% run-up in CY25TD, AAF trades at a modest ~4.5x Sep’27E EV/EBITDA. We ascribe just ~INR62/share valuation to Bharti’s stake in AAF in our TP of INR2,200 (<3% contribution), based on CMP. We believe that with continued strong performance and a long runway for growth, there is a case for further re-rating of AAF, which in turn should benefit Bharti Airtel’s shareholders.

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