Airtel Africa is dialling the right numbers – should you buy?
Mobile phone services group Airtel Africa is inexpensive and growing fast


One tip on this page that proved very successful was to go long on the African mobile phone company Airtel Africa (LSE: AAF). I highlighted it in October 2021 and by the time I had sold nearly a year later, in September 2022, the stock had jumped from 98p to 135p, making a profit of £1,480. For the subsequent two years, its performance was indifferent, but it has nearly doubled since November. It is still worth buying.
Airtel Africa specialises in telephone, internet and mobile-money services for people in 14 fast-growing African countries, including Kenya and Nigeria, which together have a combined population of 662 million people. The mobile-money aspect of its offerings is particularly interesting as the lack of a banking system in these countries means that many people use mobile-payments services as their sole way of making and receiving payments. Estimates suggest that 65%-70% of adults in these countries don’t have a formal bank account.
Airtel Africa's subscriptions are soaring
Whichever measure you use, Airtel has been doing an excellent job of building up its customer base. Counting all its customers, including those who are paying only for the most basic voice services, its total number of subscribers is increasing by just under 10% a year to 166 million. However, this headline figure underestimates the extent to which it is growing, as the number who are paying for smartphone services, which makes Airtel more money, is expanding at 20% each year, and now accounts for around half of all subscribers. The number of subscribers to its money service is also growing by a similar amount.
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Thanks to this consistent growth, Airtel’s overall revenue is now 45% higher than it was five years ago, and is expected to keep expanding at between 8% and 10% a year. While earnings have been a bit more volatile, they are expected to reach record levels over the next few years. Operating margins also remain strong, with a return on capital employed, a key gauge of profitability, of around 20%. This has enabled it to increase the dividend and return cash to shareholders via a share-buyback scheme. Despite all these positive factors, the stock trades at only 17.2 times 2026 earnings, with a decent yield of 2.6%.
Airtel looks enticing from a technical perspective, too. The share price is trading above both its 50-day and 200-day moving averages, while it has also been outperforming the wider market over the last three, six and 12 months. Perhaps the most positive sign is that the Bharti Mittal family, wealthy Indian investors who own a substantial stake in Airtel, have decided to increase their holding, a positive sign that insiders are happy with the direction of travel. I suggest going long at the current share price of 178p at £15 per 1p. Put the stop-loss at 118p, which gives you total downside of £900.
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Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
Follow Matthew on Twitter: @DrMatthewPartri
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