Airtel Africa (LSE:AAF) might not be the most famous name on the FTSE 100, but its share price performance over the past five years has been nothing short of remarkable.

Since October 2021, the telecoms group has seen its market-cap nearly treble. It’s the sort of result that would make shareholders in BT and Vodafone, another two Footsie stocks in the sector, extremely jealous. But I don’t think the party’s over yet…

What’s been happening lately?

In October, the company separately listed its money division, formally known as Airtel Mobile Commerce. It provides a financial services platform that enables users to send, receive, and store money directly on their mobile phones without needing a traditional bank account. In rural Africa, it’s been a real game changer.

Airtel Africa retains a 77.85% interest in the business, which currently (2 November) has a market-cap of £5.08bn. Airtel Africa itself is valued at £9.94bn. This is very close to the group’s pre-separation valuation. In other words, spinning out its money business has had no impact. Not yet, anyway.

On the other hand…

However, looking ahead, I think it could be a smart move. Historically, telecoms companies have attracted lower valuations than other sectors. But Airtel Money is more akin to a rapidly-growing technology company. Indeed, its first set of results as a standalone entity were impressive.

During the six months to 30 September, customer numbers increased 18.7% to 56.7m. And compared to the same period a year earlier, revenue was 34% higher. Basic earnings per share (EPS) jumped 21.1%.

Additionally, the company declared its first dividend and is aiming to return a massive 80% of earnings to shareholders each year. Of course, payouts are never guaranteed.

But the rest of the Airtel Africa business is also doing well. On Friday (30 October), for the first six months of the year, the group reported a 23.3% increase in EPS and a 26.7% rise in net cash from operating activities. Overall, customer numbers grew by 11.6% to 193.6m.

However, the group faces a number of challenges as doing business in Africa isn’t easy. There are all sorts of currency and political risks. And telecoms infrastructure is expensive, which can lead to large borrowings.

Top of the shop

Despite this, Airtel Africa remains my favourite FTSE 100 telecoms stock. Crucially, it isn’t as indebted as its two Footsie peers, who are more reliant on European markets where competition’s fierce and the return on capital is lower.

Significantly, Airtel Africa’s exposed to a continent that’s expected to see its population double in size by 2070. And with an approximate 60% of people aged under 25, it’s the youngest continent on Earth.

Mobile connectivity’s now an essential part of modern life. In my opinion, Airtel Africa’s operating in the right sector in the right place at the right time. But as well as it’s doing, there’s still another 80% of the African adult (over-15s) population to target.

Personally, I think this makes Airtel Africa an exciting opportunity to consider. But it’s just one growth stock that’s recently caught my attention…

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James Beard owns shares in Airtel Africa plc and Airtel Mobile Commerce N.V.