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    Bharti Hexacom Limited

    BHARTIHEXA
    Telecommunication·11 Nov 2025
    Management Summary

    Bharti Hexacom delivered a consistent Q2 FY26 with sequential revenue growth of 2.4% to ₹2,317 crores and a strong EBITDAaL margin of 47.5%. ARPU reached ₹251, supported by an extra day and improved portfolio mix. While the overall mobile customer base saw a marginal dip due to seasonality, the homes business recorded its highest ever net additions of 60,000. The company maintains a robust balance sheet with low net debt, though SG&A cost decline was a one-off, and homes business ARPU saw directional reduction.

    Highlights

    5

    • Revenue of ₹2,317 crores, growing 2.4% sequentially, demonstrating consistent performance.

    • EBITDAaL at ₹1,098 crores with a strong margin of 47.5%, indicating robust operational efficiency.

    • ARPU improved to ₹251, partly due to an extra day, but also reflecting underlying portfolio mix improvements.

    • Homes business achieved 60,000 net customer additions, marking its highest ever in any quarter, driven by sustained momentum.

    • Strong balance sheet with net debt (excluding leases) of ₹2,814 crores and a low net debt to EBITDAaL ratio of 0.6x.

    Concerns

    3

    • Mobile revenue earning customer base saw a marginal sequential dip to 28 million, attributed to pronounced seasonality.

    • SG&A cost decline was noted as a 'one-off' event, suggesting it may not be sustainable at current levels.

    • Homes business ARPU experienced a 'directional reduction' due to the 'land grab phase' and acquisition of customers with lower-priced packs.

    What Changed2

    vs Q3 FY26

    Guidance items2 → 3 (+1)Risks discussed1 → 3 (+2)

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue₹2,317 Cr+2.4%QoQ
    2. 02EBITDAaL₹1,098 Cr
    3. 03EBITDAaL Margin47.5%
    4. 04ARPU₹251
    5. 05Revenue Earning Customer Base28 Mn

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Capex

    ₹368 crores

    Debt

    Net ₹2,814 crores · 0.6x EBITDA

    Guidance & targets

    3
    CategoryTargetPriority
    Capex
    Capex Trend
    Directionally holding/decline on an annualized basis, moderating over time
    		Medium
    Subscriber Growth
    Homes Business Growth Trajectory
    Expected to continue
    		Medium
    Profitability
    Seasonality Impact Correction
    Expected to get corrected
    		Medium

    What to watch in Q3 FY26

    4

    Mobile Revenue Earning Customer Base

    next quarter (Q3 FY26)
    Current28 million (marginal sequential dip)
    TargetCorrection of seasonality impact, leading to growth

    Why it matters

    Seasonality caused a dip this quarter; recovery in Q3 is crucial for overall subscriber growth and revenue trajectory.

    It is just that, because of an aberration in seasonality, which we hope will get corrected in Q3.

    Risks & concerns

    3
    RiskSeverity

    Seasonality Impact on Mobile Customer Base

    Pronounced seasonality, including migratory populations and local disruptions, led to a marginal sequential dip in the mobile revenue earning customer base. — Management acknowledged

    medium

    Sustainability of SG&A Cost Reduction

    The decline in SG&A costs was identified as a 'one-off' event, suggesting it may not be indicative of a sustained trend. — Management acknowledged

    low

    ARPU Dilution in Homes Business

    The 'land grab phase' in the homes business is leading to a 'directional reduction' in ARPU as the company acquires customers with lower-priced, content-driven packs. — Management acknowledged

    medium

    Q&A highlights

    4

    “Well, there are two different geographies. There are times when it is a little higher but there are times when it is a little lower. As I mentioned in my opener, Sanjesh, seasonality was pronounced, which led to a marginal drop in customer base, which had a headwind, but other than that, there is no major difference, if you see, ARPU growths are also similar. Overall, nothing major. It is just that, because of an aberration in seasonality, which we hope will get corrected in Q3.”

    Analyst questioned Hexacom's mobile revenue growth (2.1%) being lower than Airtel's (2.6%), prompting management to explain the impact of pronounced seasonality in its specific geographies.

    asked by Sanjesh Jain

    2 min read5 chapters

    Detailed Narrative

    01

    Q2 FY26 Performance Overview

    Bharti Hexacom reported a consistent Q2 FY26 performance with revenue reaching ₹2,317 crores, marking a sequential growth of 2.4%. The company achieved an EBITDAaL of ₹1,098 crores, translating to a robust margin of 47.5%. ARPU for the quarter stood at ₹251, benefiting from an additional day in the reporting period and an improved underlying portfolio mix. Operating free cash generation, calculated as EBITDAaL less capex, was strong at ₹730 crores.

    02

    Mobile Business Dynamics

    The mobile revenue earning customer base for Bharti Hexacom was 28 million, experiencing a marginal sequential dip. This decline was attributed to pronounced seasonality, particularly in the company's non-urbanized operating geographies, which are characterized by migratory populations and local disruptions like heavy rains in Rajasthan. Despite the overall dip, the company added 193,000 smartphone customers during the quarter. Management expects the seasonality impact to correct in Q3.

    03

    Homes Business Performance

    The homes business demonstrated sustained momentum, recording 60,000 net customer additions in Q2, which was the highest ever in any quarter for this segment. This growth is expected to continue, driven by accelerated FTTH home pass deployment and FWA expansion. However, management noted a 'directional reduction' in the ARPU of the homes business. This is a strategic outcome of the 'land grab phase,' where the company acquires customers with lower-priced, content-driven packs to drive acquisition and reduce churn, leveraging FWA technology in its two key circles.

    04

    Capital Allocation and Balance Sheet

    Bharti Hexacom maintains a robust balance sheet, with net debt excluding leases at approximately ₹2,814 crores. The net debt excluding FLO (Finance Lease Obligations) to EBITDAaL ratio stood at a healthy 0.6x. The implied capex for the quarter was ₹368 crores (EBITDAaL of ₹1,098 crores minus operating free cash generation of ₹730 crores). Management indicated that the capex trend is expected to moderate📎 over time⏳, with a directional holding or decline on an annualized basis, despite current elevated capex due to parallel home pass rollout and 5G deployment.

    05

    Operational Efficiency & SG&A

    The company's SG&A costs saw a decline QoQ YoY. However, management clarified that this reduction was a 'one-off📎' event, suggesting that it might not be sustainable at the current level in future quarters. Investors were advised to consider the average of the last two trailing quarters for a more representative SG&A figure. The company continues to focus on leveraging technology and digital innovation to drive sustainability and enhance efficiency across operations.

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