Citi has reiterated its Buy rating on Bharti Hexacom, setting a target price of ₹1,655, which suggests a potential upside of 13% from the current market price of ₹1,459.50. Bharti Hexacom delivered a robust Q2 performance, with revenue growing 10% quarter-over-quarter to ₹21 billion, exceeding estimates by 4%, and EBITDA increasing 14% quarter-over-quarter to ₹10 billion, surpassing expectations by 6%.
Key highlights of the quarter include an 11% quarter-over-quarter rise in India mobile average revenue per user (ARPU), increasing from ₹205 to ₹228, though the subscriber base declined by 0.5 million to 27.1 million due to the tariff hike. The homes segment, accounting for 3% of total revenue, grew by 5% quarter-over-quarter with 30,000 new net subscriber additions, reaching a total subscriber base of 351,000, though EBITDA for this segment remained flat.
Net debt rose from ₹75 billion to ₹85 billion, primarily due to a ₹10 billion spectrum investment, but net debt-to-EBITDA improved slightly from 2.07x to 2.03x. Additionally, Q2 free cash flow (excluding spectrum) was ₹4 billion, and return on capital employed (ROCE) improved from 13.2% to 15.5%.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors are advised to perform their due diligence before making investment decisions.
