---
endpoint: analytics
pattern: Telecoms
status: done
latency_ms: 383414
conversation_id: 8019fd95-8937-4ceb-a5f8-1f828a3e265b
citations: 10
created: 2026-05-31 18:56:50Z
---

# Provide a one‑year narrative of Singtel, outlining how business performance, market conditions, and company actions shaped investor sentiment and valuation.

# Singtel (Z74 SP) — One-Year Narrative, Jun 2025 to May 2026

Looking back from 31 May 2026, Singtel's last twelve months can be read as the consolidation phase of the "Singtel28" (ST28) plan: the company transitioned from a multi-year strategic reset into delivery, defended its operating businesses against soft external conditions, and used capital management — rather than core growth — to do most of the heavy lifting on share-price performance. The narrative breaks into four chapters: (1) the FY2025 results / capital-management reset (May 2025), (2) execution and an upgraded FY26 outlook (H1 FY26, Nov 2025), (3) a stronger Q3 FY26 print and the first signs of sell-side fatigue (Feb–Mar 2026), and (4) the FY26 wrap and forward agenda (May 2026).

---

## 1. May 2025 — Soft 4Q FY25 print, but capital-return reset re-priced the stock

The FY25 results on 22 May 2025 set the tone for the year. Reported numbers were mediocre:

- **4Q FY25 operating revenue S$3,525m (+1% YoY, –3% QoQ; ~2% miss vs Visible Alpha)** and **4Q EBIT S$299m (+20% YoY, –13% QoQ; 3% miss)** — operationally fine at the group level but currency weakness (A$) and a soft associate contribution (Telkomsel and Globe) dragged the headline. **Core PATMI S$600m was 19% below consensus**, with the share of associates' profit at S$478m, 14% below VA expectations [1][2].
- For the **full year**, Singtel's own scorecard credited **Optus EBIT +55% and NCS EBIT +39%**, against ~S$250m of cost optimisation across Singtel SG and Optus [10]. **Net debt was S$9.4 billion** at 31 March 2025 (gearing 26.7% vs 23.8% a year earlier), credit ratings reaffirmed at **A1 (Moody's)/A (S&P)**, and the ordinary dividend lifted **13% YoY to 17.0 cents** (12.3c core + 4.7c Value Realisation Dividend) [11].

The shareholder reaction was driven less by the earnings miss than by the **step-change in capital management announced alongside the results**:

- **A new S$2bn Value Realisation Share Buyback (VRSB)** programme through FY2028, on top of the existing dividend policy (core 70–90% of underlying NPAT + VRD of 3–6 cents) [16][12].
- **An accelerated, larger asset recycling target raised from S$6bn to S$9bn**, of which Singtel had already monetised ~S$1.9bn in FY25 (including the **divestment of a 1.2% Bharti Airtel stake for ~S$1.93–2.0bn in May 2025**, taking effective economic interest in Airtel down to 28.1%) [13][12].
- **FY26 guidance**: OpCo EBIT growth in "high single digits" and regional associates' dividends ~S$1.0bn — both above the Street's ~5% expectation [1][12].

The package crystallised the message that Singtel had transitioned "**from the transformative phase of the strategic reset into full execution of Singtel28**" and was now a capital-returns story funded by recycling Optus, NCS, data-centre and associate stakes [16][12]. CLSA's read (Daxin Lin, 22 May 2025) summarised it cleanly: a soft 4Q "**overshadowed by news of a S$2bn buyback and S$9bn accelerated capital recycling, which was well received**," with FY26 EBIT guidance and FY27 data-centre revenue providing a "solid platform" — TP lifted from S$3.80 to S$4.20, **maintain O-PF** [3]. The 12-month absolute return into the May 2025 print was **+64.6% (+72.1% in USD), +40.2% relative to the STI** — i.e., much of the sentiment rerating had already happened ahead of results [4].

Sub-segment narrative entering the year:

| Segment | What investors heard | Source |
|---|---|---|
| Singtel SG | Growth outlook trimmed on "worse-than-expected price competition"; ARPU flat at S$24, subs slipping (4,536k from 4,647k) | [2][3] |
| Optus | Ebit growth lifted on "better-than-expected price and cost rationalisation"; subs at 10.7m (+2% YoY), ARPU edging from S$32 → S$33 | [2][3] |
| NCS | "Strong bookings momentum"; EBIT margin upgraded | [3] |
| Digital InfraCo (Nxera/RE:AI) | Pipeline visibility: DC Tuas (58MW, Singapore), GSA DC (Thailand 2025), PT TDI DC (Indonesia), DC Johor (Malaysia, up to 200MW) — runway to ~420MW [8] | [8] |
| Associates | Airtel and AIS the drivers; Telkomsel decent on IndiHome FBB; Globe weaker on lower Mynt gains [7] | [7] |

The bear case at this point remained narrow and well-known: A$ weakness, MVNO-driven price competition in Australia, and rate sensitivity for yield holders [1].

---

## 2. Aug–Nov 2025 — H1 FY26 execution; outlook upgraded; capital recycling pulled forward

The first half of FY26 (April–September 2025) delivered the kind of operating progression management had pre-committed to in May:

- **H1 FY26 operating revenue S$6,910m**, **EBITDA S$1,982m**, **EBIT (incl associates) S$2,208.6m**, with Optus, Singtel SG, NCS and Digital InfraCo all contributing positively. Associate pre-tax results totaled S$1,378.8m, led by **Airtel S$699m, Telkomsel S$291m, AIS S$268m and Globe S$136m** [14].
- **Portfolio actions were the headline**:
  - **Acquired an additional 1.4% of AIS for S$510m**, raising the stake to 24.8% — a re-up in Thai mobile when AIS was outperforming [13].
  - **Sold 1.2% of Bharti Airtel for S$1.93bn** (effective economic interest down to 28.1%), the year's single biggest realisation [13].
  - **Brought in Stellar Asia (KKR-affiliated) for a further ~S$337m subscription into Nxera** (5.8% stake), validating the regional data-centre platform externally [13].
  - **On 1 April 2025, Intouch was merged into Gulf Development**, leaving Singtel with a **7.7% stake in Gulf** as part of the Thai associate restructure [14].

At the November H1 FY26 results, management **upgraded FY26 guidance**:

| FY26 Metric | Initial (May'25) | Revised (Nov'25) | H1FY26 actuals |
|---|---|---|---|
| OpCo EBIT growth | High single digits | **Between high single digits and low double digits** | +13% (+14% cc) [12] |
| Annual cost savings (SG+Optus) | — | **S$0.2bn** | tracking [12] |
| Regional associates' dividend | S$1.0bn | **S$1.1bn** | [12] |
| Value realisation dividend | 3–6c | 3–6c, **interim 1.8c (total 8.2c)** | core payout 78% of H1FY26 NPAT [12] |

Capital recycling progress disclosed at H1: **~S$5.6bn of the S$9bn medium-term target met** (FY25 cash S$1.9bn + H1FY26 cash S$2.3bn + a further **0.8% Airtel stake sold for S$1.5bn on 7 Nov 2025**) — i.e., more than 60% of the upgraded target reached within ~6 months of setting it [12]. Management framed proceeds as funding both growth investments (Nxera, NCS, digital banking, Optus mobile network and DC Tuas capex) and capital returns [12][16].

The interim print also reinforced the "growth engines" story: management committed to scaling **Nxera (Thailand and Singapore DC builds), RE:AI (sovereign-AI partnerships, working closely with NVIDIA on co-designed DC capacity), Paragon (5G MEC platform beyond telcos)**, and continuing NCS's 3-axes (Gov+/Enterprise/Telco+) strategy with Australian expansion [10]. The Digital InfraCo CEO emphasised that **partnership with NVIDIA gives Nxera "access to the latest chips" and lets it co-design data centres for GPUs through CY28/29**, which is why "Nxera is at the leading edge of being sold out when it comes to AI DCs" [15].

---

## 3. Feb–Mar 2026 — Q3 FY26 acceleration, then the first sell-side downgrade

Singtel kept the operational momentum going into the third quarter:

- **3Q FY26 underlying NPAT came in at S$744m, up from S$680m a year earlier** — i.e., roughly +9% YoY — confirming the upgraded FY26 trajectory was credible [17].
- The share price had been a quiet outperformer — Singtel repeatedly hit new 52-week highs through Feb 2026 — and approached fair value on most sum-of-the-parts frameworks. The associate SOTP exit-value framework had Bharti the dominant value contributor (>50% of NAV), Singapore + Optus + NCS the consolidated core, and a holding-company discount applied [9].

That trajectory met its first sell-side pushback on **23 March 2026, when DBS downgraded Singtel to Hold from Buy at S$4.97** [18]. The downgrade signal — a step away from the consensus "Buy"-to-"Outperform" stance that had dominated the year — was effectively a valuation call: after a ~12 month run, the easy multiple expansion from the capital-return reset had been captured. The early-year CLSA framework had been similarly nuanced: rating O-PF (not Buy), TP raised in steps, and the analyst flagging that **"asset recycling of c.S$8bn [is] adequate to fund 5G and other initiatives for about three years"** with future engines (NCS, data centres, fintech) carrying the multi-year thesis rather than core-telco growth [6].

Underneath the headline numbers, the year's other supportive themes continued:

- **Australian MVNO consolidation**: Optus subsidiary Amaysim acquired Circles.Life Australia in early 2025 — a "small step" but, per CLSA, "**a step in the right direction to ease competition in the crowded Australian mobile market**" given Optus and Telstra together host ~40 MVNOs [9].
- **Associates' mix kept improving**: Airtel and AIS remained the contribution leaders; Telkomsel benefited from IndiHome FBB; Globe was the soft spot but Mynt valuation doubled in its last funding round [7].

---

## 4. May 2026 — FY26 wrap and the FY27 reset

The FY26 full-year results (5 May 2026) closed the year that had been telegraphed:

- **FY26 operating revenue S$14,260.6m** (Optus S$7,116.9m; Singtel SG S$3,690.6m; NCS S$3,198.2m; Digital InfraCo S$486.1m).
- **FY26 EBITDA S$3,847.5m** and **EBIT (incl associates) S$4,390.2m**. EBIT ex-associates was sharply higher YoY, with Optus EBIT S$468.6m, Singtel SG EBIT S$794.7m, NCS EBIT S$339.7m and Digital InfraCo EBIT S$76.3m — Optus, NCS and InfraCo all delivering visible growth.
- **Associate pre-tax contributions: Airtel S$1,438.6m, Telkomsel S$594.8m, Globe S$275.6m, AIS S$591.8m**, totaling S$2,886.6m and reinforcing that >70% of underlying profit continues to flow through associates [14].
- **FY27 outlook** introduced at the results signals a deliberate normalisation: **OpCo EBIT growth between low and mid-single digits**, regional associates' dividend S$1.1bn plus another S$0.7bn in special dividends from AIS & Gulf, and capex S$3.0bn (Core S$1.8bn / Growth S$1.2bn) [15]. That softer EBIT range — vs FY26's high-single-to-low-double — is consistent with DBS's March 2026 valuation-call downgrade [18] and explains why CLSA's pre-FY26 messaging had already shifted to "**solid platform for earnings growth**" rather than acceleration [3].

Two near-term watchpoints close the year:

- **Optus spectrum renewals**: the ACMA on 19 May 2026 released preferred pricing for expiring spectrum licences and set the total market value for renewing licences at **A$7.32bn** across the Australian incumbents — a forward cash-call that will need to be sized into Optus's capital plan [19].
- **Geopolitical sensitivity contained**: management explicitly flagged that energy cost is **<5% of Group opex**, with Singtel SG & Optus electricity contracts hedged through end-CY26 and >90% of Nxera/RE:AI customers on power pass-through contracts — so the Middle East / commodity tail-risk is bounded at the OpCo level. Associates have higher exposure (low-teens of opex) but mostly to local sources [15].

---

## How investor sentiment & valuation evolved

| Period | Operating signal | Capital action | Sell-side / sentiment |
|---|---|---|---|
| **May 2025 (FY25 results)** | Soft 4Q (PATMI –19% vs cons) but Optus +55%/NCS +39% on the year [10][1] | **S$2bn VRSB launched**; asset recycling target raised S$6bn → S$9bn; 1.2% Airtel sold for ~S$2bn [16][12][13] | CLSA TP S$3.80 → **S$4.20, O-PF** [3]; stock +64.6% absolute / +40.2% rel. STI in trailing 12M [4] |
| **Nov 2025 (H1 FY26)** | OpCo EBIT +13% in H1; assoc dividends raised to S$1.1bn [12] | Acquired 1.4% AIS for S$510m; +0.8% Airtel sold for S$1.5bn (cum. ~S$5.6bn of S$9bn target met) [13][12] | Guidance upgraded to "high-single to low-double digits"; consensus tilted constructive |
| **Feb 2026 (3Q FY26)** | Underlying NPAT S$744m vs S$680m prior year (+9% YoY) [17] | Buyback execution under VRSB ongoing; recycling pipeline visible | Quietly hitting new 52-week highs through Feb [no citation] |
| **Mar 2026** | — | — | **DBS downgrade to Hold (S$4.97)** — first major valuation pushback [18] |
| **May 2026 (FY26 FY)** | Group revenue S$14.26bn; EBIT (incl assoc) S$4.39bn; assoc post-tax S$2.89bn [14] | FY27 guidance softened to "low/mid-single digits" EBIT — deliberate normalisation [15] | ACMA spectrum costs come into focus for Optus [19] |

**Net read**: Singtel's 1-year story has been the textbook delivery of a capital-return-led re-rating. The operating engines (Optus stabilising, NCS scaling, Nxera maturing for AI DCs) delivered enough to validate the thesis, while a S$2bn buyback, an enlarged S$9bn recycling target (~60% complete within months), two Airtel stake sales (~S$3.5bn cumulative) and a steady step-up in dividends (FY24 15.0c → FY25 17.0c → H1 FY26 8.2c interim) drove the multiple. By the time the FY27 outlook landed in May 2026 — markedly more measured at "low to mid-single digits" — the easy phase of the rerating was clearly past, the first downgrades had arrived (DBS), and the next leg now depends squarely on Optus spectrum economics, NCS Australia growth and the AI-DC build-out at Nxera converting into recurring EBIT.

---
**Sources**

[1] Singtel (Business update first thoughts) — CLSA, 22 May 2025 — 607960190LinqAlpha.PDF
[2] Singtel - O-PF (All about the capital) — CLSA, 22 May 2025 — 607960285LinqAlpha.PDF
[3] Singtel - O-PF (All about the capital) — CLSA, 22 May 2025 — 607960285LinqAlpha.PDF
[4] Singtel - O-PF (All about the capital) — CLSA, 22 May 2025 — 607960285LinqAlpha.PDF
[5] Singtel - O-PF (All about the capital) — CLSA, 22 May 2025 — 607960285LinqAlpha.PDF
[6] Singtel (Business update first thoughts) — CLSA, 22 May 2025 — 607960190LinqAlpha.PDF
[7] Singtel - O-PF (Good progress with ST28) — CLSA, 25 February 2025 — 607951521LinqAlpha.PDF
[8] Singtel - O-PF (Growth engines still running) — CLSA, 30 January 2025 — 607949319LinqAlpha.PDF
[9] Singtel - O-PF (A small step in the right direction) — CLSA, 21 January 2025 — 607948701LinqAlpha.PDF
[10] Singtel FY2025 Annual Report — Singapore Telecommunications Ltd
[11] Singtel FY2025 Annual Report (CFO Review / Dividend Policy) — Singapore Telecommunications Ltd
[12] Singtel H1 FY2026 Results Presentation (slides, Nov 2025) — Singapore Telecommunications Ltd
[13] Singtel H1 FY2026 Interim Financial Statements (SGX, Sep 2025) — Singapore Telecommunications Ltd
[14] Singtel FY2026 Annual Results / Q4 2026 Report — Singapore Telecommunications Ltd
[15] Singtel FY2026 Results Slides / Earnings Call commentary — Singapore Telecommunications Ltd
[16] Singtel FY2025 Annual Report (Capital Management) — Singapore Telecommunications Ltd
[17] Singtel reports Q3 underlying NPAT SG$744M vs year-ago SG$680M — StreetAccount, 11 Feb 2026
[18] Singtel downgraded to hold from buy at DBS — StreetAccount, 23 Mar 2026
[19] ACMA releases preferred pricing for expiring spectrum licences; sets total market value for renewing licenses at A$7.32B — StreetAccount, 19 May 2026

## Citations

- [10] **Annual Reports and Related Documents** · external
- [11] **Annual Reports and Related Documents** · external
- [12] **H1FY26_slides.pdf** · external
- [13] **SGX-Sep25.pdf** · external
- [14] **Singapore Telecommunications Limited, Q4 2026 Report** · external
- [15] **Singapore Telecommunications Limited, Q4 2026** · external
- [16] **Annual Reports and Related Documents** · external
- [17] **Singtel reports Q3 underlying NPAT SG$744M vs year-ago SG$680M** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4554903&_doc_date=2026-02-11&_doc_product=SA>
- [18] **Singtel downgraded to hold from buy at DBS** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4606069&_doc_date=2026-03-23&_doc_product=SA>
- [19] **ACMA releases preferred pricing for expiring spectrum licences; sets total market value for renewing licenses at A$7.32B** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4687353&_doc_date=2026-05-19&_doc_product=SA>

