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
Bharti Hexacom operates under a Unified License (with Access Service Authorization) in two non-contiguous telecom circles: Rajasthan and Northeast. Think of it as owning a petrol pump in the middle of Rajasthan and another one in Assam, with no infrastructure sharing in between. The company provides mobile telephony, fixed-line telephone, and broadband services—basically, the full telecom menu for customers in those regions.
As of Q3 FY26, Hexacom has 28.4 million mobile customers and is the second-largest operator in both circles combined with a market share of approximately 37–38%. That’s strategic—you don’t leave a region open to aggressive pricing. Airtel doesn’t want Jio or Vodafone-Idea creating a foothold here, so Hexacom serves as a price setter and market protector.
The ARPU (Average Revenue Per User) for mobile is ₹253 in Q3 FY26, up from ₹204 in Q4 FY25. That’s a 24% jump in two quarters, driven by tariff hikes in June 2024 and portfolio premiumisation. Unlike Airtel’s pan-India ARPU of ₹245, Hexacom’s ₹253 is higher—because these are smaller, more price-inelastic markets where affordability matters less than in tier-1 cities. Here, if you want a phone line, you pay what Hexacom asks.
Mobile Customers28.4MUp 0.37M QoQ
Mobile ARPU₹253+24% YoY
Market Share37.6%Regional Duopoly
Homes Revenue+10% QoQBroadband Bet
Revenue Breakup: Mobile Services ~97% of revenue. Homes (broadband) ~3%. The company is still fundamentally a mobile operator. The broadband bet is real (record 73k net adds in homes in Q3, homes revenue +10% QoQ) but it’s a sidecar, not the main engine.
💬 Do you think Airtel is building Hexacom for long-term regional value, or just to monetise spectrum and exit at some point? Drop your take in the comments!
04 — Financials Overview: Q3 FY26
Quarterly Results That Scream “Growth Slowdown”
Result type: Quarterly Results | Q3 FY26 EPS: ₹9.47 | Annualised EPS (Q3×4): ₹37.88 | Q4 FY25 EPS (for reference): ₹9.37
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 2,360 | 2,251 | 2,317 | +4.85% | +1.8% |
| Operating Profit (EBITDAaL) | 1,254 | 1,152 | 1,208 | +8.8% | +3.8% |
| OPM % | 53% | 51% | 52% | +200 bps | +100 bps |
| PAT | 474 | 318 | 421 | +48.7% | +12.6% |
| EPS (₹) | 9.47 | 6.37 | 8.42 | +48.7% | +12.5% |
The Math Doesn’t Lie (But Context Does): Q3 FY26 EPS of ₹9.47 looks great until you realise Q3 FY25 had a tax anomaly (tax rate 31% vs. normal ~25%). Strip that out, normalise for similar tax, and the YoY comparison isn’t as thrilling. Revenue growth is slowing (4.85% YoY is fine, but 1.8% QoQ suggests momentum is weakening). The 48.7% PAT jump is mostly tax-driven, not operational. OPM did expand 200 bps YoY (to 53%), which is genuine. But here’s the thing: when management talks about “unresolved customer issues” and “volatile roaming revenue,” they’re signalling operational headwinds that the quarterly numbers don’t fully capture yet.
05 — Valuation: Fair Value Range
Is 45.5x P/E Justified For A Regional Telecom Player?
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