01 — At a Glance
The Second Fiddle Playing Off-Key
- 52-Week High / Low₹2,053 / ₹1,225
- Q3 FY26 Revenue₹2,360 Cr
- Q3 FY26 PAT₹474 Cr
- Q3 EPS (₹)9.47
- Annualised EPS (Q3×4)₹37.88
- Book Value₹125
- Price to Book12.8x
- Dividend Yield0.62%
- Debt / Equity1.06x
- Mobile Subscribers28.4 Mn
The Opening Audit: Bharti Hexacom closed Q3 FY26 with ₹2,360 crore revenue (+1.8% QoQ, +4.85% YoY), ₹474 crore PAT (+7.5% QoQ, +48.7% YoY), and a 45.5x P/E multiple that asks: why is Airtel’s smaller sibling trading at a 25% premium to Bharti Airtel itself? The stock’s 6-month return is -9.33%. Over 3 months? -7.12%. Somebody’s paying full price for a subsidiary with growth headwinds, ambiguous management answers, and subscriber “issues” that management won’t fully quantify.
02 — Introduction
Welcome to Airtel’s Regional Monopoly Play
Bharti Hexacom is the telecom equivalent of owning a regional fast-food franchise while living next to a McDonald’s. Airtel owns 70%. Telecommunications Consultants India (a government entity) owns 15%. Public owns 15%. And everyone’s waiting to see if this thing has an independent future or if it’s just a financial engineering exercise to monetise spectrum and towers in Rajasthan and the Northeast.
The company was incorporated in 1995, listed in April 2024 (yes, after 29 years as a private subsidiary), and is the second-largest telecom operator in Rajasthan and Northeast circles combined. That’s “second” in a two-player game with Airtel as the first. Jio is not seriously fighting there yet. So de facto, it’s a regional monopoly.
Q3 FY26 results show the usual story: revenue inching up 4.85% YoY, PAT jumping 48.7% YoY (mostly because Q3 FY25 was a tax-heavy quarter), and homes (broadband) finally waking up with record net adds of 73,000. But the mobile side—which is 97% of revenue—is showing growth deceleration that management attributes to: (a) an unresolved customer issue, (b) volatile in-roamer revenue, and (c) the absence of winter tourism uplift. Translation: we’re not sure why growth slowed down, but pick the excuse that feels right to you.
The Listing Backdrop (April 2024): BHL went public via an Offer For Sale where Telecommunications Consultants India sold its 15% stake to the public at ₹690/share. Stock now trades at ₹1,605. That’s a 133% return for IPO investors in less than a year. But momentum is stalling. The last two quarters show the same story: single-digit revenue growth, margin compression, and management excuses that are becoming as predictable as monsoon rain in Kerala.
03 — Business Model: A Tale of Two Geographies
Rajasthan and Northeast: Where Tariffs Die And ARPU Comes Back To Life
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