Emkay Global Issues New Target for Bharti Hexacom
Target Price: ₹1,550
Current Market Price: ₹1,563.40
Bharti Hexacom (Hexacom) reported results that aligned with market expectations, achieving a 2.3 percent quarter-on-quarter revenue growth, reaching ₹2,410 crore, alongside a 1 percent increase in EBITDA to ₹1,270 crore.
The main driver of revenue growth was the Home Services segment, which saw a 20.6 percent quarterly increase attributed to strong subscriber additions. However, the Mobile Services segment experienced only a 1.6 percent QoQ growth, affected by a slight decrease in Average Revenue Per User (ARPU). Notably, Mobile Services results were consistent with market forecasts.
Capital expenditure rose significantly to ₹590 crore from ₹340 crore in Q3FY26, primarily focused on Mobile Services. This led to an Operating Free Cash Flow (OFCF) decrease to ₹730 crore, down from ₹940 crore in the previous quarter.
While Hexacom exhibits solid execution, the absence of tariff hikes and rising smartphone prices may hinder ARPU growth. Elevated capital expenditures, totaling ₹160 crore, contributed to a cash outflow of ₹110 crore. The company is prioritizing Fiber over Fixed Wireless Access (FWA) due to increased chip costs, although the higher installation expenses associated with Fiber in challenging terrains necessitate the continued use of FWA solutions.
Emkay Global previously noted that market optimism regarding ARPU expectations was overestimated (refer to report: “Great operations, greater expectations”). The market has started adjusting its FY28E ARPU projections, currently set at ₹309, down from ₹327 in August 2025.
Emkay Global has maintained a “Reduce” rating and adjusted the target price downwards by approximately 9 percent to ₹1,550, from a previous valuation of ₹1,700. Risks to this analysis include unexpected ARPU improvements, significant market share gains from competitors, and ongoing positive momentum in Home Services.
Published on May 15, 2026
