Bharti Hexacom cuts lease-excluded net debt 44% year-on-year

Bharti Hexacom Limited reduced net debt excluding lease obligations by 44% year-on-year to Rs 1,575.5 crore at September 30, 2026, from Rs 2,818.3 crore, although the measure rose from Rs 960.4 crore at June 30 after it paid a Rs 900 crore dividend, including tax, during the September quarter.

How much did Bharti Hexacom reduce debt year-on-year?

Bharti Hexacom reduced net debt excluding lease obligations by Rs 1,242.8 crore year-on-year, while net debt including leases declined by Rs 1,348.5 crore to Rs 4,950.4 crore at September 30, 2026. The company reported Rs 6,298.9 crore of net debt including leases at September 30, 2025, meaning the reported measure fell 21% over the period.

The difference between the two debt measures was Rs 3,374.9 crore of lease obligations at September 30, 2026, compared with Rs 3,480.6 crore a year earlier. Lease obligations therefore accounted for most of the Rs 4,950.4 crore net-debt figure including leases, while the lease-excluded calculation focuses on borrowings and deferred-payment liabilities after financial assets.

The debt schedule shows deferred-payment liability declining to Rs 2,651.6 crore from Rs 2,874.2 crore, while investments and receivables available to offset debt increased to Rs 1,069.2 crore from Rs 286.9 crore. Short-term borrowings and the current portion of long-term debt were Rs 0.5 crore at September 30, 2026, compared with Rs 252.2 crore a year earlier.

Why did Bharti Hexacom's debt rise from June to September?

Bharti Hexacom's net debt excluding leases increased by Rs 615.1 crore from Rs 960.4 crore at June 30, 2026 to Rs 1,575.5 crore at September 30. Net debt including leases also rose sequentially, by Rs 557.9 crore from Rs 4,392.5 crore to Rs 4,950.4 crore, after falling materially on a year-on-year basis.

The September-quarter cash-flow statement records Rs 900 crore of dividend paid, including tax, within financing activities. Financing activities used Rs 1,155.4 crore in the quarter, also including Rs 103.9 crore of lease-liability payments and Rs 152 crore of interest and other finance charges. The report does not separately allocate the sequential movement in net debt among those outflows.

Liquidity balances changed during the quarter. Current investments were Rs 823.4 crore at September 30, down from Rs 1,723.8 crore at June 30, while other bank balances rose to Rs 274.3 crore from Rs 28 crore. Cash and bank balances were Rs 7.5 crore at September 30, compared with Rs 10 crore three months earlier.

Net cash from operating activities was Rs 1,161.5 crore in the September quarter, up from Rs 1,127.5 crore a year earlier. Investing activities used Rs 8.6 crore, against Rs 629.9 crore in the comparable quarter, as the company reported Rs 665.7 crore of net proceeds from current investments, compared with a Rs 208.8 crore use of cash a year earlier.

Did Bharti Hexacom's operations support cash generation?

Bharti Hexacom reported operating free cash flow of Rs 1,080.3 crore in the September 2026 quarter, up 22% from Rs 888.8 crore a year earlier. The company defines this measure as earnings before interest, tax, depreciation and amortisation, or EBITDA, less capital expenditure, and it does not include the Rs 900 crore dividend payment.

Quarterly EBITDA increased 13% to Rs 1,416.6 crore from Rs 1,256.4 crore, while reported capital expenditure declined 9% to Rs 336.3 crore from Rs 367.6 crore. Revenue rose 11% to Rs 2,581.8 crore, and EBITDA margin expanded by 0.7 percentage points to 54.9% from 54.2%.

Mobile Services generated Rs 1,177 crore of operating free cash flow, up 20% year-on-year, on EBITDA of Rs 1,363.5 crore and capital expenditure of Rs 186.5 crore. Homes, Office and Other Services recorded negative operating free cash flow of Rs 96.7 crore, compared with negative Rs 95.7 crore a year earlier, because its Rs 149.8 crore capital expenditure exceeded its Rs 53.1 crore EBITDA.

Profit after tax increased 34% to Rs 566.1 crore in the September quarter from Rs 421.2 crore. Net finance cost declined 17% to Rs 115.2 crore from Rs 138 crore, while cash profit from operations before derivative and exchange fluctuations increased to Rs 1,298.8 crore from Rs 1,112.7 crore.

What do Bharti Hexacom's leverage measures include?

Bharti Hexacom calculates net debt excluding lease obligations as short-term borrowings and current long-term debt plus deferred-payment liability, less cash and cash equivalents and investments and receivables. At September 30, 2026, the calculation included Rs 0.5 crore of short-term borrowings, Rs 2,651.6 crore of deferred-payment liability, Rs 7.5 crore of cash and equivalents, and Rs 1,069.2 crore of investments and receivables.

Adding lease obligations of Rs 3,374.9 crore produces net debt including leases of Rs 4,950.4 crore. The company presents earnings before interest, tax, depreciation, amortisation and leases, or EBITDAaL, as a pre-Ind AS 116 measure, pairing it with debt excluding lease obligations; EBITDA is paired with debt including leases.

Its annualised net debt-to-EBITDA ratio including leases was 0.87 times at September 30, 2026, down from 1.25 times a year earlier but up from 0.80 times at June 30. The annualised debt-excluding-leases-to-EBITDAaL ratio was 0.31 times, compared with 0.64 times a year earlier and 0.20 times at June 30.

The balance sheet separately lists Rs 5,180.5 crore of non-current borrowings and Rs 846.5 crore of current borrowings at September 30. Those lines are not the same as the net-debt schedule because the schedule also includes deferred-payment liability, lease obligations and the specified cash, investment and receivable balances.

Conclusion

Bharti Hexacom's September 2026 results show lower debt on a year-on-year basis, led by a Rs 1,242.8 crore reduction in net debt excluding leases and a Rs 1,348.5 crore decline in net debt including leases. EBITDA growth to Rs 1,416.6 crore, lower quarterly capital expenditure of Rs 336.3 crore and reduced net finance cost of Rs 115.2 crore accompanied the lower year-on-year debt balances.

The next reported debt balance will show how operating cash generation, capital expenditure and any further financing distributions affect the sequential increase recorded after the Rs 900 crore dividend. Investors can also monitor the two leverage ratios, which improved year-on-year but rose from June to September, and the investment and receivable balance of Rs 1,069.2 crore used in Bharti Hexacom's lease-excluded net-debt calculation.