PETALING JAYA: Axiata Group Bhd
is heading into a potentially stronger earnings phase as its Indonesian operations move closer to a turnaround, while asset monetisation could unlock further value for shareholders.
The group’s push to lift dividends and streamline its portfolio is also expected to keep investor attention on its balance sheet and potential corporate deals.
BIMB Research, which maintained its “buy” call on Axiata with a target price of RM3, said: “We remain optimistic on Axiata with near-term earnings to be driven by recovery in XLSmart aided by post-merger synergies and the potential completion of the accelerated depreciation by end-2026.”
BIMB Research said the Indonesian unit’s losses narrowed 61% quarter-on-quarter to 282 million rupiah in the second quarter of 2026, from 716 million rupiah.
Management expects the business to turn around in 2027, with dividend contributions resuming in 2028, it noted.
“In the meantime, Robi Axiata PLC is benefitting from lower subscriber acquisition costs as the Bangladesh’s government has abolished the 300 Bangladeshi taka SIM tax,” BIMB Research highlighted.
Robi is the second largest mobile network operator in Bangladesh.
TA Research is also positive on Axiata’s prospects, pointing to the group’s strategic plan, particularly its focus on capital discipline, portfolio streamlining and value creation.
“The group remains focused on delivering its Axiata28 strategic priorities, with emphasis on prudent capital allocation, streamlining its portfolio, and enhancing value creation across its operating companies,” the research house said.
TA Research maintained a “buy” call on Axiata, but lowered its target price to RM2.40 from RM2.60 after raising its conglomerate discount to 45% from 40%, reflecting expectations that asset monetisation could take longer.
Hong Leong Investment Bank Research similarly sees near-term earnings remaining soft, cutting its financial year 2026 (FY26) to FY28 earnings forecasts by 23%, 6% and 5%. It maintained a “buy” with a lower target price of RM2.55, while identifying a potential monetisation of Axiata’s stake in edotco as a key catalyst for a re-rating.
Kenanga Research is more cautious despite raising its FY26 and FY27 earnings forecasts by 30% and 53%, respectively, on stronger Robi service revenue and lower network costs. It maintained a “market perform” call, but trimmed its target price to RM1.95 from RM2.05.
Kenanga Research also expects dividend growth of more than 10% annually to support the stock while investors await progress on asset sales.
For the second quarter ended June 30, 2026 (2Q26), Axiata’s revenue slid to RM2.87bil from RM2.97bil in 2Q25, while net profit stood at RM42.52mil, compared with RM270.82mil previously.
For the first half of 2026 (1H26), its revenue fell to RM5.67bil from RM5.86bil, while net profit was lower at RM316.32mil, compared with RM430.66mil in 1H25.
Meanwhile, one analyst noted that Axiata’s prospects are gradually improving as the group moves towards a leaner portfolio and greater earnings contribution from its key operating markets.
“While the near-term numbers may remain uneven, stronger execution of its strategic priorities should provide a firmer foundation for growth,” he added.
