Citi has initiated coverage on Bharti Hexacom with a ‘Buy’ rating, setting a target price of ₹1,405, which represents an 18% upside from the current market price. Bharti Hexacom, a pure-play regional telecom operator, has caught the attention of analysts for its strong balance sheet and robust financial outlook.
Citi forecasts a 26% compound annual growth rate (CAGR) in EBITDA for Bharti Hexacom over the next three years, surpassing the projected growth rates of 20% and 22% for Bharti’s India and mobile operations, respectively, and 24% for Vodafone Idea.
The investment bank also expects Bharti Hexacom’s net debt-to-EBITDA ratio to decline to 0.9x by FY26 and further to 0.3x by FY27, driven by strong free cash flow (FCF) generation. Citi projects a 6% FCF yield for FY26 and a 7% yield for FY27, creating potential for increased payouts, with a dividend yield of 1-2% in the coming years.
