It’s not often I get to talk about a Singaporean blue-chip company. But its recent development in doubling its return on invested capital has changed my mind about the ‘boring’ nature of one. If anything, it is now embarking on one of the most exciting trajectories in the global AI industry.

This week, I am talking about SingTel. And do I have a lot to talk about! Its recent earnings release for the full year 2026 (March 2025 to March 2026) is eye-opening. SingTel reported that it has nearly doubled its return on invested capital from 6.8% in 2022 to 11.1% in 2026. 

From purchasing a data centre operator to scaling up its AI ambitions, SingTel’s outlook and prospects look strong.

But how strong? Let’s take a deeper look at it. 

At its core, SingTel is still a telecommunications company, but it has embarked on a transformation plan called SingTel28. SingTel Singapore and Optus are still SingTel’s core telecommunication businesses. They made up about 80% of its revenue in 2026 (March 2025 to March 2026).

However, in 2024, SingTel decided that it needed to scale up its new growth areas, particularly its AI-related ones. NCS is SingTel’s digital information technology services arm that helps its clients integrate AI into their operations. Meanwhile, its Digital Infraco segment houses its data centre business, Nxera and RE:AI, which functions as an end-to-end AI platform that provides GPU as a service (GPUaaS). Both these businesses now account for about 20% of its revenue in 2026.

Let’s be clear here. SingTel doesn’t have strong financial growth like the other booming AI tech companies. Instead, it offers a mix of safety and growth potential that positions SingTel as an in-between company. Optus is its biggest revenue contributor, generating AU$8.3 billion (SG$7.6 billion) in 2026. Revenue grew at a stable rate of 2%, driven by higher postpaid prices and higher growth in Amaysim (prepaid and flexible SIM-only mobile plans). Meanwhile, its SingTel Singapore segment experienced a revenue decline of 3% as it faces price competition in its consumer sub-segment.

However, both its NCS and Digital InfraCo segments grew by 7% and 12%, respectively, on higher AI-related demand. Most importantly, their margins are becoming better. Earnings before Interest and Tax (EBIT) grew by 34% and 24% respectively as they scale up their operations.

As a result, SingTel’s profits are growing much quicker than top-line revenue. Profits are up by 42% to SG$5.6 billion (with non-operating gains of SG$2.8 billion), while net profit margins increased from 28.3% in 2025 to 39% in 2026. 

On top of its core telecommunications business, its NCS and Digital InfraCo businesses are expected to drive future revenue growth. SingTel is aiming to become a one-stop solutions provider to enterprises and companies by providing connectivity (internet, data), cloud (storage), and AI hardware and software services.

Firstly, on the data centre front, it is finalising the acquisition of STTelemedia, a data centre operator, by 2H 2026. This acquisition would raise its combined design capacity to 2.8 GW and give it access to 12 markets across Singapore, Asia and Europe. 

Secondly, its RE:AI business has successfully deployed its pilot program and deployed 1MW of GPU cluster capacity with a SG$25 million revenue in 2026. It now has plans to ramp up to 11MW by 2027 and has already secured SG$600 million of long-term contracts.

For the year 2027, SingTel is targeting an EBIT growth rate of between low and mid-single digits, while investing SG$3.0 billion in capital expenditures. 

Analysts have an OVERWEIGHT call for SingTel, with an average target price of SG$5.37. This implies an upside of +20%.

SingTel is currently trading at a price-to-book ratio of 2.7 times, in line with the industry’s average of 2.6 times. 

Source: Shareinvestor

SingTel currently offers an attractive mix of safety and growth opportunities through its stable telecommunication businesses and its AI-related businesses.

Investors who want to adopt a long-term investment strategy with a mix of risk can consider SingTel in their portfolio.