Airtel Africa (LSE: AAF) has delivered a total return of 211% in the past two years, meaning an investment of £5,000 in August 2024 would be worth over £15,500 today.
That’s an outstanding stock market return in such a short space of time. But what drove those gains and could it happen again in the following two years? Let’s take a look…
A combination of factors
Airtel’s spectacular performance has been driven by a combination of strong operating growth, tariff increases, and recovering currencies, among others. Expanding margins have helped improve the balance sheet, and renewed excitement about the planned Airtel Money listing gave it an extra boost.
The company reported some compelling numbers in its FY26 results:
With more cash flowing, the company’s been able to invest in network expansion while reducing debt and boosting dividends.
Meanwhile, data has become the group’s largest revenue stream, supported by rising smartphone ownership, customer growth and greater data usage.
A planned London listing of Airtel Money could unlock additional value by allowing investors to value the fintech business separately from the telecom operations.
But whether or not a further 200% gain over the next two years is possible depends on a number of things going right.
Mitigating factors
Airtel Africa exhibits many classic signs of a high-growth-oriented business — surging revenues, a clear roadmap of expansion, and strong management. But it still faces significant challenges due to its region of operation.
Some areas of Africa face political unrest, unstable utilities, complex regulatory measures, and volatile currency shifts. These issues have impacted the company’s profits in the past, at times prompting dividend cuts.
So when compared to slow and stable growth stocks like Diploma or Halma, Airtel still sits squarely in the high-risk/high-reward basket.
Looking ahead
A further 200% share-price gain over the next two years would take the shares to roughly 980p. It’s not impossible, but it would require exceptional earnings growth, continued margin expansion and a successful high-value Airtel Money listing.
On top of that, it would require years of political and financial stability across all its operational regions in Africa.
We could look to Rolls-Royce for comparison — between August 2022 and August 2024, it climbed 500%. In the following two years, it made a further 200% gain. But not only was it coming from a very depressed valuation, it didn’t face the regional risks that Airtel does — and it benefited from boosted defence spending.
