- FY26 results were within expectations. Revenue/EBITDA was 98% of our FY26e forecast. PATMI exceeded estimates at 107% of FY26e due to lower-than-modelled depreciation. Underlying PATMI grew 14% YoY to S$1.4bn in 2H26. The rise in inflation and energy costs is prompting Singtel to guide to more cautious low- to mid-single-digit FY27e EBIT guidance (FY26 +10%). FY26 dividends improved 9% to 18.5 cents.
- Contribution from associates was the largest driver of growth. Excluding Intouch, PAT jumped 19% to S$1bn in 2H26. Advanced Info earnings surged 42% to S$260mn, whilst Bharti increased 19% to S$434mn despite the 9.7% depreciation of the rupee.
- Our ACCUMULATE recommendation is maintained, but we lower our target price to S$5.20 on lower mark-to-market valuations of the associates. The Middle East conflict has increased energy costs, weakened currencies, slowed economic growth and tightened consumer spending in the countries Singtel operates. Singtel’s next leg of growth lies in its increased exposure to the massive build-out of digital infrastructure and the adoption of AI. The contribution from AI will climb through the acquisition of STT GDX, introduction of GPU-as-a-Service (RE: AI), hyperscaler demand for fibre connectivity and NCS AI solutions for enterprises. There is up to S$1bn of share buyback in FY27e.
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