Bharti Hexacom Q3 Profit Surges 82% on Tribunal Win, Debt Slashed

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AuthorAnanya Iyer|Published at:
Bharti Hexacom Q3 Profit Surges 82% on Tribunal Win, Debt Slashed
Overview

Bharti Hexacom posted a stellar Q3 FY26, with net profit soaring 82% year-on-year to ₹4,737 million, significantly boosted by an ₹419 million exceptional gain from a favorable Delhi Income Tax Tribunal judgment. Revenue increased by 4.8% YoY to ₹23,598 million, supported by a 7.4% rise in EBITDA to ₹12,820 million and a 130 bps expansion in EBITDA margin to 54.3%. The company continued its deleveraging, reducing net debt by 29% YoY to ₹56,289 million, improving its Net Debt to EBITDA ratio to 1.10 times. Operational metrics showcased strong customer additions and a substantial 29.8% surge in mobile data traffic.

Bharti Hexacom Delivers Robust Q3 FY26 Performance

Bharti Hexacom Limited has announced strong financial results for the third quarter ended December 31, 2025, demonstrating significant growth in profitability and a marked improvement in its balance sheet. The company reported a net profit after exceptional items of ₹4,737 million, an impressive 82% year-on-year (YoY) increase from ₹2,593 million in Q3 FY25. This surge was largely attributable to an exceptional gain of ₹419 million (net of tax) stemming from a favourable judgment by the Delhi Income Tax Tribunal concerning spectrum charges.

The Numbers:

  • Revenue: ₹23,598 million, up 4.8% YoY from ₹22,507 million.

  • EBITDA: ₹12,820 million, an increase of 7.4% YoY.

  • EBITDA Margin: 54.3%, expanding by 1.3 percentage points from 53.0% YoY.

  • EBIT: ₹7,151 million, up 8.0% YoY with a margin of 30.3%.

  • Net Income (before exceptional items): ₹4,318 million, growing 19% YoY.

  • Net Income (after exceptional items): ₹4,737 million, up 82% YoY.

  • Capital Expenditure (CapEx): ₹3,403 million, a 20% YoY increase.

  • Operating Free Cash Flow (EBITDA - Capex): ₹9,417 million, up 3% YoY.

Financial Deep Dive:
The company's operational profitability, measured by EBITDA, grew by 7.4% YoY, coupled with a healthy expansion in its EBITDA margin by 130 basis points to 54.3%. This indicates effective cost management and pricing power. Net profit before exceptional items also saw a solid 19% YoY growth, highlighting underlying business strength. The substantial increase in net profit after exceptional items underscores the impact of the one-off tribunal gain.

Balance Sheet & Debt Reduction:
Bharti Hexacom has made significant strides in strengthening its balance sheet through aggressive deleveraging. Net debt, including lease obligations, was reduced by 29% YoY to ₹56,289 million as of December 31, 2025. This has led to a substantial improvement in leverage ratios, with the Net Debt to EBITDA ratio (annualised) falling to 1.10 times from 1.65 times, and the Net Debt to EBITDAaL ratio (excluding lease obligations) improving to 0.48 times from 1.03 times.

Operational Momentum:
Operationally, the company added 368,000 mobile customers during the quarter, expanding its base to 29.04 million, a 3.7% YoY increase. Mobile data traffic witnessed a remarkable surge of 29.8% YoY to 2,022 Petabytes (PBs), with average data usage per customer rising 22.1% YoY to 32.0 GB per month. The Homes, Office and Other Services segment was a standout performer, with revenues growing by a robust 50.8% YoY.

Strategic Moves & Outlook:
The company also announced a collaboration with Bharti Airtel and Warner Bros. to launch 'Airtel Cartoon Network Classics' on Digital TV, aiming to enhance its content offerings. While the exceptional gain provides a significant boost to the current quarter's net profit, the sustained growth in revenue, EBITDA, operational metrics, and aggressive debt reduction indicate a positive trajectory for Bharti Hexacom. Investors will be watching for the continued execution of its growth strategies and its ability to maintain margin expansion amidst evolving market dynamics.

Impact:
8/10 - The strong financial results, coupled with significant debt reduction and robust operational performance, make this a highly positive development for Bharti Hexacom and its investors. The improved leverage ratios enhance financial resilience.

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