Jio IPO delay among 2 reasons why Jefferies cuts Bharti Airtel’s target price

Jefferies has reduced its target price for Bharti Airtel from Rs 2,575 to Rs 2,250, citing concerns over a potential delay in Jio's IPO and increasing macroeconomic risks. Despite reiterating a 'Buy' recommendation, the brokerage has adjusted its revenue and EBITDA estimates for Bharti by 6-8% for the fiscal years 2026 to 2028. The anticipated delay of Jio's IPO beyond mid-2026 is expected to hinder tariff hikes, with Jefferies predicting only a single 15% increase in sector tariffs by December 2026. Furthermore, Bharti Airtel's recent entry into the non-banking financial company (NBFC) sector has raised questions regarding capital allocation, contributing to a 14% decline in its shares this year, underperforming the Nifty50 index. Jefferies estimates that Bharti's new lending venture could add around 3% to its market value under favorable conditions but might also erode 1% in less favorable scenarios. The brokerage's revised valuation reflects both the timing risks associated with Jio's IPO and concerns surrounding Bharti's financial services investments, leading to an adjusted EV/EBITDA multiple for the company's Indian operations. Despite these challenges, Jefferies maintains that Bharti Airtel has a robust growth outlook, projecting a 13-14% CAGR in revenues and EBITDA over the next few years.