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    Bharti Hexacom Limited

    BHARTIHEXA
    Telecommunication·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

    5

    • 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

    3

    • 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

    Metrics

    10

    Periods

    2

    Q4

    6
    • Revenue
      ₹2,414 Cr
      QoQ+2.3%
    • EBITDAaL Margin
      47.9%
    • ARPU
      ₹252
    • Mobile Customer Base
      28.8 Mn
    • Net Customer Additions
      ₹3.70L Cr

    FY26

    4
    • Revenue Growth
      9.4%
    • EBITDAaL Growth
      17.9%
    • EBITDAaL Margin
      47.6%
    • Operating Free Cash Generation
      ₹2,935 Cr
      YoY+27%

    Segment breakdown

    Homes and Office Business
    51% FY26 Revenue Growth₹4.0L Cr FY26 Net Adds₹1.5L Cr Q4 Net Adds21% Q4 Revenue Growth
    List

    Capital allocation

    4
    high confidence
    CategoryHeadline
    Capex

    ₹586 crores

    Debt

    Net ₹2,000 crores

    Dividend

    ₹18/share (final)

    Liquidity

    Liquidity disclosed

    Balance sheet is robust

    Guidance & targets

    3
    CategoryTargetPriority
    Dividend
    Dividend Payout
    progressively increasing
    		High
    Homes Business
    Homes Business Growth
    continue to grow
    		Medium
    Homes Business Strategy
    FWA/Fiber Deployment
    pivot to fiber wherever possible, not give up FWA opportunity
    		High

    What to watch in Q1 FY27

    4

    ARPU Trajectory

    next quarter
    Current₹252 (Q4 FY26)
    TargetStabilization 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

    4
    RiskSeverity

    ARPU Stagnation/Headwinds

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

    medium

    FWA Chip Issues

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

    medium

    Geopolitical Crisis Impacts

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

    medium

    Competitive Market

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

    low

    Q&A highlights

    5

    “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

    2 min read6 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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🌐.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.