Revenue and Operational Gains

Bharti Hexacom's revenue increased 5.4% year-on-year to ₹2,414 crore in the fourth quarter of FY26. This growth was driven by modest mobile tariff increases, steady customer additions, and significant expansion in its homes, office, and other services segment. Mobile services revenue grew 3.8%. Average Revenue Per User (ARPU) for mobile services improved to ₹252, up from ₹242 in the previous year. Mobile data usage rose 30.9% year-on-year, with average monthly consumption reaching 34.2 GB per user. The company's Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) rose 8.5% to ₹1,267 crore, and the EBITDA margin expanded by 200 basis points to 53%, indicating effective cost management.

Homes Segment Fuels Growth

The strongest growth driver was the homes, office, and other services segment, which grew revenue by 65.3% year-on-year. This segment added 395,000 customers over the year, significantly boosting the company's revenue mix. This performance shows success in expanding bundled services and fixed-line broadband, a strategy delivering results and helping offset slower growth in the crowded mobile market.

Industry Context and Bharti Airtel Comparison

Bharti Hexacom's results come as the Indian telecom sector remains cautiously optimistic, with growth expected from rising ARPU and favorable pricing. Potential tariff hikes are anticipated by July 2026. The company's net profit drop contrasts with its parent, Bharti Airtel. Bharti Airtel reported a 33.5% net profit fall to ₹7,325 crore but saw its revenue grow by 15.7%. Bharti Airtel's ARPU was higher at ₹257 in Q4 FY26.

Valuation and Peer Comparison

Bharti Hexacom's P/E ratio of approximately 41.7x is comparable to Bharti Airtel's. However, it trades at a premium to the Asian Wireless Telecom industry average of 18x, raising valuation concerns.

Concerns Over Profit Dip and Valuation

Despite positive revenue and EBITDA trends, the 4.6% decline in net profit is a major concern. This suggests that while operations are efficient, other costs or provisions may be affecting overall profit. The company's debt-to-equity ratio of 0.95 is higher than the industry median. The stock has faced challenges despite strong financial results, with some analysts downgrading it to 'Sell' in April 2026 due to technical factors and high valuations compared to benchmarks. While the consensus analyst rating is 'Buy' with an average target price around ₹1,872, a low target price of ₹1,450 is near current levels, suggesting potential downside. The stock has also trailed broader indices over the past year.

Analyst Outlook and Growth Prospects

Analysts remain positive, with the average 12-month price target for Bharti Hexacom around ₹1,911, suggesting about 26% upside potential. The sector's anticipated tariff hikes and continued growth in data consumption and fixed broadband services offer support. The company's strategic investments in the homes and office segment, alongside 5G network expansion, position it for future revenue growth. However, investors will watch cost management and margin sustainability amid rising capital costs and competition.