1. At a Glance
Bharti Hexacom is Airtel’s stealth-mode cousin ruling Rajasthan and the Northeast telecom thrones. It’s profitable, growing fast, and squeezing margins tighter than your jeans post-Diwali. But is the ₹88,000 Cr valuation already dialled in?
2. Introduction with Hook
Imagine Airtel as Tony Stark. Bharti Hexacom is his arc reactor in Rajasthan and the Northeast. Quiet. Powerful. And glowing red-hot.
- 37.6% subscriber market share in two circles (Rajasthan + Northeast)
- 116% profit growth in FY25 with a fat 49% EBITDA margin
- Yet, P/E of 66 screams, “This ain’t cheap, bro!”
3. Business Model (WTF Do They Even Do?)
Bharti Hexacom (BHL) provides mobile, broadband, and fixed-line services. It holds the Unified License from the DoT to operate in:
- Rajasthan (major battleground)
- Northeast states (Assam, Meghalaya, Nagaland, etc.)
It’s basically Airtel without the baggage of other geographies. Think of it as Airtel’s sandbox, minus the Jio wars of metros.
Also:
- Offers fiber broadband (Xstream)
- Powers enterprise telecom services
- Infrastructure-sharing with Indus Towers
- Spectrum acquisitions through Adani too (frenemies much?)
4. Financials Overview
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Sales (₹ Cr) | 6,579 | 7,089 | 8,548 |
| Operating Profit (₹) | 2,786 | 3,361 | 4,197 |
| Net Profit (₹) | 549 | 504 | 1,494 |
| OPM % | 42% | 47% | 49% |
| EPS (₹) | 21.97 | 10.09 | 29.87 |
| Dividend Payout % | 0% | 40% | 33% |
📈 Net Profit tripled in FY25. From zero to hero in 3 fiscal years.
📉 But high depreciation and interest still chew through EBITDA.
5. Valuation
Let’s not beat around the telecom pole:
- P/E = 66.1 → Premium for growth, not comfort.
- Book Value = ₹119, stock trades at 14.9x BV.
- Fair Value Range (DCF + Peer EV/EBITDA avg):
₹1,350 – ₹1,750 per share
Why the discount in FV range? Because this stock needs spectrum monetization clarity, capex cooling, and some tariff sanity to be sustainably sexy.
6. What’s Cooking – News, Triggers, Drama
🔥 Recent Buzz:
- Tower sale to Indus put on hold (Apr 2025)
- Airtel prepaid ₹5,985 Cr spectrum dues (Mar 2025)
- Supreme Court tax waiver granted (May 2024)
🍿 Potential Blockbusters:
- Revised tariffs from July 3, 2024 (ARPU booster incoming)
- 5G monetization roadmap (they’re currently just flexing speed)
- Any fresh drama from AGR dues, though most is now settled
7. Balance Sheet
| Item | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity Capital | 250 Cr | 250 Cr | 250 Cr |
| Reserves | 3,960 Cr | 4,389 Cr | 5,682 Cr |
| Borrowings | 9,204 Cr | 8,105 Cr | 7,353 Cr |
| Total Liabilities | 18,253 Cr | 18,517 Cr | 19,251 Cr |
| Total Assets | 18,253 Cr | 18,517 Cr | 19,251 Cr |
Key Takeaways:
- Borrowings reducing. ✅
- CWIP dropping → Capex peak may be behind. ✅
- Reserve build-up looks healthy. ✅
8. Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net CF (₹ Cr) |
|---|---|---|---|---|
| FY23 | 5,108 | -2,031 | -3,111 | -34 |
| FY24 | 3,546 | -1,155 | -2,404 | -13 |
| FY25 | 4,583 | -2,341 | -2,265 | -23 |
Observations:
- Operating cash is strong.
- Investing heavily in infra still, but financing cash flows are shrinking = Less debt.
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE % | 10% | 14% | 18% |
| ROE % | 18% | 9% | 25% |
| Debtor Days | 8 | 23 | 5 |
| Working Cap | -136 | -154 | -142 |
Verdict:
- ROCE & ROE trending upwards.
- Ultra-tight working capital. Telecom ke thekedaar hain.
10. P&L Breakdown – Show Me the Money
| Year | Sales (₹ Cr) | Expenses | OPM % | Net Profit (₹ Cr) |
|---|---|---|---|---|
| FY23 | 6,579 | 3,793 | 42% | 549 |
| FY24 | 7,089 | 3,728 | 47% | 504 |
| FY25 | 8,548 | 4,351 | 49% | 1,494 |
Strong operating efficiency, but bottom-line whiplash in FY24 due to high tax/depreciation. FY25, they’re back in beast mode.
11. Peer Comparison
| Company | P/E | ROCE % | Net Profit (₹ Cr) | OPM % | Market Cap (₹ Cr) |
|---|---|---|---|---|---|
| Bharti Airtel | 41.8 | 15.4 | 27,731 | 53.8 | 11,59,139 |
| Bharti Hexacom | 66.1 | 17.6 | 1,494 | 49.1 | 88,624 |
| Vodafone Idea | NA | -1.9 | -27,383 | 41.6 | 83,099 |
| Tata Comm | 37.1 | 14.8 | 1,326 | 19.7 | 49,282 |
Hexacom is punching well above its revenue weight class, but at a premium P/E too.
12. Miscellaneous – Shareholding, Promoters
| Entity | % Holding (Mar 2025) |
|---|---|
| Promoters | 70.00% |
| FIIs | 4.33% |
| DIIs | 9.97% |
| Public | 15.71% |
- Airtel holds the whip. BHL is majority-owned.
- Public float is slim, adding volatility to the scrip.
- No promoter drama – clean governance record so far.
13. EduInvesting Verdict™
Bharti Hexacom is the regional telecom beast you didn’t know you needed in your portfolio—until now.
- Operating metrics? Top class.
- Profit growth? Bollywood style comeback arc.
- Valuation? Richer than Ambani’s Diwali parties.
But tread with caution. High P/E and spectrum investments still need to be digested. For now, Hexacom has “Moat in the Desert” vibes—solid margins, solid growth, and just a little bit of telecom spice.
Metadata
– Written by EduInvesting Research | July 15, 2025
– Tags: Telecom, Bharti Group, Regional Monopoly, 5G, Rajasthan, Northeast, Infra Sharing, India Digital Expansion
