Bharti Hexacom shares dropped nearly 3% on Wednesday to trade at Rs 1,800 after the company reported weaker-than-expected Q1 FY26 results. Global brokerage CLSA downgraded the stock to ‘Underperform’ and set a target price of Rs 1,525, implying an 18% downside from current levels.
The Bharti Airtel subsidiary posted a 23% year-on-year decline in net profit to Rs 391.6 crore for the June quarter, down from Rs 511 crore last year. The dip was mainly attributed to higher network operating expenses, which rose 12% YoY to Rs 522 crore, and increased government levies.
Revenue came in at Rs 2,260 crore, down 1% quarter-on-quarter but up 18% YoY. Despite the growth, it fell short of market estimates. EBITDA also missed expectations at Rs 1,160 crore, down 1% QoQ but up 33% YoY. The company’s average revenue per user (ARPU) rose 2% sequentially to Rs 246, which is 18% higher than Reliance Jio’s.
The home broadband segment saw its highest-ever net subscriber addition at 54,000, taking the total to 502,000. However, it still contributes just 3% to total revenue.
Meanwhile, Jefferies maintained its bullish stance with a ‘Buy’ rating and a target price of Rs 2,250. The brokerage noted that while profits missed due to elevated costs, revenue growth was steady. Jefferies expects Bharti Hexacom to clock a 24% EBITDA CAGR and 29% free cash flow CAGR over FY25–28E, justifying its valuation premium to parent Bharti Airtel.
Bharti Hexacom trades at 15x FY27 EV/EBITDA, a 40% premium to Bharti Airtel.
