Bharti Hexacom Limited — Q4 FY26 earnings call

Call held 14 May 2026

Management summary

Bharti Hexacom delivered strong Q4 and FY26 results, driven by robust revenue and EBITDAaL growth, with margins expanding to 47.6% for the full year. The company saw significant increases in operating free cash flow and dividends. While the homes business showed record net additions, ARPU growth faced headwinds from 5G pack adoption and international roaming. Management acknowledged potential stress on smartphone upgrades due to rising handset prices and impacts from geopolitical events.

Highlights

  • FY26 Revenues grew 9.4%, demonstrating strong performance.

  • FY26 EBITDAaL grew 17.9%, with margin expanding 3.4% to 47.6%, reflecting operational excellence.

  • FY26 Operating free cash generation increased 27% to ₹2935 Crores, indicating robust cash flow.

  • The Board recommended a dividend of ₹18 per share for FY26, a significant increase from ₹10 per share last year.

  • Q4 Homes business achieved a record high of 148,000 net adds and 21% sequential revenue growth.

Concerns

  • Q4 ARPU was ₹252, impacted by two fewer days and headwinds from 5G pack adoption.

  • Potential stress on smartphone upgrades due to rising handset prices was noted.

  • Geopolitical crisis impacting international roaming and capex (INR depreciation, gas supply affecting tower build-outs).

Key financials

2 periods

Q4

  • Revenue
    ₹2,414 Cr
    QoQ +2.3%
  • EBITDAaL Margin
    47.9%
  • ARPU
    ₹252
  • Mobile Customer Base
    28.8 Mn
  • Net Customer Additions
    3,70,000 subscribers
  • Capex
    ₹586 Cr

FY26

  • Revenue Growth
    9.4%
  • EBITDAaL Growth
    17.9%
  • EBITDAaL Margin
    47.6%
  • Operating Free Cash Generation
    ₹2,935 Cr
    YoY +27%

What they filed

Q1 FY27: revenue up 10.9%, net profit up 23.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue2,098 2,251 2,289 2,263 2,317 +10%2,360 +5%2,414 +5%2,510 +11%
EBITDA1,002 1,152 1,168 1,161 1,208 +21%1,254 +9%1,267 +8%1,322 +14%
Net profit253 261 468 392 421 +66%474 +82%447 −4%482 +23%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Homes and Office Business
    51% FY26 Revenue Growth3,95,000 subscribers FY26 Net Adds1,48,000 subscribers Q4 Net Adds21% Q4 Revenue Growth

Capital allocation

high confidence
  • Capex ₹586 Cr
    • 5G densification
    • Network modernization
    • Growing homes and IPTV business
    During the year, our capex spends were directed towards 5G densification, network modernization and growing our homes and IPTV business rapidly. ... Capex for the quarter was Rs.586 Crores.
  • Debt Net ₹2,000 Cr
    Balance sheet is robust with a net debt excluding leases, at about Rs.2000 Crores.
  • Dividend ₹18/share (final)
    The Board recommended a dividend of Rs.18 per share as compared to Rs.10 per share last year, in line with our philosophy of progressive payout.
  • Liquidity Liquidity disclosed Balance sheet is robust
    Balance sheet is robust with a net debt excluding leases, at about Rs.2000 Crores.

Guidance & targets

Dividend

  • Dividend Payout Dividend · future · High confidence progressively increasing
    We have increased the dividend payout significantly and we have been committed that we will be looking at a progressively increasing dividend payout and we continue to remain on that.

    — Soumen Ray

Homes Business

  • Homes Business Growth Homes Business · future · Medium confidence continue to grow
    Pranav, first of all, I cannot give you forward-looking statements. We do not give guidance but see, the objective is to continue to grow.

    — Soumen Ray

Homes Business Strategy

  • FWA/Fiber Deployment Homes Business Strategy · future · High confidence pivot to fiber wherever possible, not give up FWA opportunity
    So, I do not think that whilst prices will go up and we will pivot to fiber wherever we can, we are going to give up on the opportunity of acquiring more homes and offices through either FWA or fiber in Bharti Hexacom. No, we will not let up on that opportunity.

    — Soumen Ray

What to watch in Q1 FY27

ARPU Trajectory

next quarter
Current ₹252 (Q4 FY26)
Target Stabilization or improvement in ARPU

Why it matters

ARPU is a key indicator of pricing power and monetization for telecom operators.

ARPU for the quarter came in at Rs.252, impacted by two days less, whilst on an EDB basis, it would be closer to about Rs.257 to Rs.258.

Risks & concerns

  • ARPU Stagnation/Headwinds

    medium

    Headwinds from 5G pack adoption, international roaming, rising handset prices, and a 'pack that destroys the whole price ladder' impacting ARPU growth.

    Well, yes, there is something else which is played out, which is the whole, eat as much as you can on 5G packs, that is the more adoption happens, that will clearly create a headwind.

    Management acknowledged

  • FWA Chip Issues

    medium

    Rising prices of chipsets and memory, particularly for fixed wireless access, could impact home growth, though company plans to pivot to fiber where possible.

    So, how do you look at FWA? The way we look at FWA is what is the cost of a connected home? ... If you go to NESA, actually, FWA creates an opportunity to go around and connect more homes, which, it will be difficult with fiber.

    Management acknowledged

  • Geopolitical Crisis Impacts

    medium

    Impacts on international roaming, capex due to INR depreciation, and gas supply affecting galvanizing industry (lower tower build-outs).

    There are a few areas of our operations, which are seeing impact including international roaming, capex on account of INR depreciation, restriction on gas supply affecting galvanizing industry in turn leading to lower tower build-outs.

    Management acknowledged

  • Competitive Market

    low

    The market remains competitive, especially for the homes business, requiring continuous effort for growth.

    Pranav, first of all, I cannot give you forward-looking statements. We do not give guidance but see, the objective is to continue to grow. As of now, there is no reason for me in earnings call to flag off that there is a concern, but it is a competitive market, so the competition part always exists...

    Management acknowledged

Q&A highlights

4 direct
Hexacom vs Airtel Performance Partial
Sanjesh, I think our impression that Hexacom is underpenetrated the two circles that it operates, has borne out well. I mean, of course, we can cut the data the way we want but we have done reasonably well, the ARPU gap is much closer, we have been able to close the ARPU gap. As I had told earlier also, the postpaid penetration bit and the IR bit will be a little differential, as you know, and as I think, mentioned earlier in the call. The smartphone upgrade will see a bit of stress and hence, we might lag a little bit because that is a very strong indicator.

Analyst questioned why Hexacom's growth metrics were lower than Airtel's, prompting management to explain market differences and specific challenges like smartphone upgrade stress.

Asked by Sanjesh Jain

Cash Flow Utilization and Payout Ratio Direct
We have increased the dividend payout significantly and we have been committed that we will be looking at a progressively increasing dividend payout and we continue to remain on that. I think we have moved from 3 to 4 to 10 to 18, so I think, we have been sticking to our word around progressively increasing the dividend payout.

Analyst inquired about Hexacom's cash flow utilization and potential for higher payout, to which management confirmed a significant increase in dividend payout and a commitment to further progressive increases.

Asked by Sanjesh Jain

FWA and Home Growth Deceleration Direct
So, how do you look at FWA? The way we look at FWA is what is the cost of a connected home? ... If you go to NESA, actually, FWA creates an opportunity to go around and connect more homes, which, it will be difficult with fiber. So, I do not think that whilst prices will go up and we will pivot to fiber wherever we can, we are going to give up on the opportunity of acquiring more homes and offices through either FWA or fiber in Bharti Hexacom. No, we will not let up on that opportunity.

Analyst asked if FWA chip issues could decelerate home growth, and management clarified their strategy to balance FWA and fiber deployment to continue expanding the homes business.

Asked by Sanjesh Jain

ARPU Growth Headwinds Direct
Well, yes, there is something else which is played out, which is the whole, eat as much as you can on 5G packs, that is the more adoption happens, that will clearly create a headwind. However, having said that, the ARPU that we give is the average for the quarter. I mean, the exit for the quarter, the quarter plays out there at three months but, Pranav, there is no red flags per se, on ARPU, in terms of, is there a cause of concern. The headwinds that we have are similar to any other player in any other geography, which is lower international roaming, handset prices slightly going up and hence having a pressure on 2G to 4G upgrades and the fact that we now have a pack which destroys the whole price ladder, which any Company should have.

Analyst questioned the lack of ARPU growth despite subscriber additions, leading management to detail multiple headwinds including 5G pack adoption, handset prices, and a 'price ladder destroying' pack.

Asked by Pranav Kshatriya

Regulatory Charge in Q4 Direct
Well, you know, as a prudent organization, we look at all the basket of charges and whatever is happening in the ecosystem and we follow a very prudent accounting policy and we do it from time-to-time. There is a regular cadence that we do, guided by, along with the auditors and by the Board and audit committee. So we have felt that there is something that we should, in a prudence, take provision for, which has been disclosed. There is nothing new, exceptional or unearthly which has come. It is just interpretation of issues as time progresses and various things happen in the ecosystem but nothing new.

Analyst sought clarification on a regulatory charge, and management confirmed it was a provision for an existing issue due to interpretation change, not a new demand, reassuring investors about its nature.

Asked by Vivekanand Subbaraman

2 min read 6 chapters

Detailed narrative

Strong FY26 Performance and Margin Expansion

Bharti Hexacom reported robust financial performance for FY26, with revenues growing 9.4% and EBITDAaL increasing by 17.9%. The EBITDAaL margin expanded by 3.4% to reach 47.6%, driven by operational excellence and portfolio premiumization. Operating free cash generation for the year saw a significant 27% increase, reaching ₹2935 Crores, underscoring the company's strong cash flow generation.

Q4 FY26 Financials and Subscriber Growth

For Q4 FY26, the company recorded revenues of ₹2414 Crores, representing a sequential growth of 2.3%. EBITDAaL stood at ₹1155 Crores, with a margin of 47.9%. The mobile customer base reached 28.8 million, with approximately 370,000 net customer additions and 478,000 smartphone additions in the quarter, marking the highest smartphone additions in the last four quarters.

ARPU Headwinds and Mobile Strategy

Q4 ARPU was ₹252, though on an EDB basis it would be closer to ₹257-258, impacted by two fewer days in the quarter. Management noted headwinds from the adoption of 5G packs, rising handset prices, and a 'pack that destroys the whole price ladder.' Despite these challenges, the company aims to accelerate ARPU growth through postpaid differentiation and continued rural network expansion.

Homes Business Momentum and Strategy

The homes business demonstrated strong momentum, achieving a record high of 148,000 net additions in Q4 and sequential revenue growth of approximately 21%. This growth is supported by FWA expansion into new pin codes, deepening FTTH footprint, and the rollout of IPTV services. Management emphasized a strategy of prioritizing fiber where available but not abandoning FWA for difficult terrains, ensuring continued expansion of the homes and office business.

Capital Allocation and Shareholder Returns

Bharti Hexacom maintained a robust balance sheet with net debt excluding leases at around ₹2000 Crores for FY26. The Board recommended a dividend of ₹18 per share for FY26, a significant increase from ₹10 per share last year, aligning with the company's philosophy of progressive payout. Capex for Q4 was ₹586 Crores, directed towards 5G densification, network modernization, and the growing homes and IPTV business.

Regulatory and Geopolitical Landscape

Management addressed a regulatory charge in Q4, clarifying it was a provision for an existing issue due to a change in interpretation, not a new government demand. The company also acknowledged broader geopolitical risks impacting international roaming, capex due to INR depreciation, and gas supply affecting tower build-outs. Bharti Hexacom is implementing 'war on waste' initiatives to mitigate these external pressures.

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