Bharti Hexacom Shares Dip Amid Valuation Concerns Despite In-Line Q2 Results

Bharti Hexacom's stock price experienced a decline of over 3% on Thursday, falling to an intraday low of ₹1,808.35. This downturn was triggered by analysts highlighting concerns over the company's high valuation, despite its September quarter (Q2 FY26) results being largely in line with expectations. Analysts from Motilal Oswal Financial Services pointed out that the stock has seen multiple re-ratings since its market debut in April 2024, leading to it trading at approximately 17.5 times its one-year forward EV/Ebitda. They consider this a significant premium compared to Bharti's India business and deem the current risk-reward profile unattractive.

Bharti Hexacom reported a consolidated revenue of ₹2320 crore for Q2 FY26, an 11% year-on-year increase, and Ebitda rose 21% year-on-year to ₹1210 crore. However, Ebitda missed estimates due to higher operating expenses. Net profit stood at ₹420 crore, up 66% year-on-year, but also below expectations.

Brokerage firms offered mixed views. Motilal Oswal maintained a 'Neutral' rating with a target price of ₹1,975, while reducing Ebitda estimates. JM Financial kept a 'Buy' rating and raised its target to ₹2,195, citing industry ARPU growth and potential tariff hikes. Emkay Global Financial Services maintained its 'Reduce' rating with a target price of ₹1,800, expressing concerns about slowing ARPU growth and expensive valuations.

Impact: This news directly impacts Bharti Hexacom's stock performance and investor sentiment. It highlights the market's sensitivity to high valuations in the telecom sector and can influence future trading decisions for the stock and potentially similar entities. The differing analyst views also create volatility. Rating: 7/10.

Difficult Terms: * **EV/Ebitda:** Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization. A valuation metric comparing a company's total value to its operating profit. * **Opex:** Operating Expenses. Costs incurred for the normal day-to-day running of a business. * **ARPU:** Average Revenue Per User. The average revenue generated from each user or subscriber. * **CAGR:** Compound Annual Growth Rate. The average annual growth rate of an investment over a specified period of time longer than one year. * **FWA:** Fixed Wireless Access. A broadband internet service delivered wirelessly to a fixed location. * **FTTH:** Fiber to the Home. A broadband internet connection that uses fiber optic cables to deliver high-speed data directly to homes. * **FY26:** Fiscal Year 2026. Refers to the financial year ending March 31, 2026. * **Q2:** Second Quarter. Refers to the period from July to September in the financial year. * **Q-o-Q:** Quarter-on-Quarter. Compares a metric from one quarter to the previous quarter. * **Y-o-Y:** Year-on-Year. Compares a metric from a period to the same period in the previous year. * **bp:** Basis Points. A unit of measure equal to one-hundredth of a percent (0.01%). * **6G:** Sixth Generation. The next generation of wireless technology after 5G, expected around 2030. * **IPO:** Initial Public Offering. The first time a company offers its stock for sale to the public. * **H1CY26:** First Half of Calendar Year 2026. Refers to the period from January to June 2026.