Bharti Hexacom EBITDA margin reaches 54.9% for Sep-26

Bharti Hexacom Limited reported a 54.9% earnings before interest, taxation, depreciation and amortization (EBITDA) margin for the quarter ended Sep-26, up from 54.2% a year earlier, as its defined operating-cost ratio fell to 28.6% from 30.8%. EBITDA rose to Rs 1,416.6 crore on total revenue of Rs 2,581.8 crore.

How did Bharti Hexacom’s EBITDA margin change?

Bharti Hexacom’s EBITDA margin increased through each of the five reported quarters, reaching 54.9% in Sep-26 from 54.2% in Sep-25. Total revenue rose by Rs 264.5 crore year on year to Rs 2,581.8 crore, while EBITDA increased by Rs 160.2 crore to Rs 1,416.6 crore. The Sep-26 margin was also 0.1 percentage point above the 54.8% recorded in Jun-26.

Bharti Hexacom’s defined operating-expense ratio was 28.6% in Sep-26 and Jun-26, compared with 30.8% in Sep-25. The presentation defines this expense line as operating expenses excluding access charges, cost of goods sold, licence fee, and charity and donation. Net revenue, after access charges, cost of goods sold and licence fee, rose to Rs 2,115 crore from Rs 1,922.2 crore a year earlier.

Over the five-quarter comparison, total revenue increased by Rs 264.5 crore, while the defined operating-expense line rose by Rs 23.8 crore. That difference lowered the defined ratio, although several costs excluded from that measure increased. Total operating expenses, which include access and spectrum-related charges, rose to Rs 1,204.7 crore in Sep-26 from Rs 1,109.2 crore in Sep-25.

Why did Bharti Hexacom’s operating-cost ratio fall?

Bharti Hexacom’s defined operating-cost ratio declined because defined operating expenses grew more slowly than total revenue in Sep-26. Defined expenses increased 3.3% year on year to Rs 737.9 crore, while total revenue increased 11.4% to Rs 2,581.8 crore. The calculation is based on the company’s specified expense definition rather than its full operating-expense schedule.

Access charges increased by Rs 40.2 crore year on year to Rs 207.7 crore, while licence fees, revenue share and spectrum charges rose by Rs 19.8 crore to Rs 233.6 crore. Network operations cost increased by Rs 31.5 crore to Rs 561.8 crore. These items are included in the Rs 1,204.7 crore operating-expense total but are excluded from the defined Rs 737.9 crore operating-expense ratio.

Energy cost, which is included in network operations cost, was Rs 237.9 crore in Sep-26, compared with Rs 212.8 crore in Sep-25 and Rs 237.8 crore in Jun-26. Selling, general and administration expense declined by Rs 8.2 crore year on year to Rs 143.6 crore, while employee costs rose by Rs 0.5 crore to Rs 32.5 crore and cost of goods sold rose by Rs 11.7 crore to Rs 25.5 crore.

The excluded cost lines also affected net revenue as a share of total revenue. Access charges represented 8.0% of total revenue in Sep-26, compared with 7.2% in Sep-25, and cost of goods sold represented 1.0%, compared with 0.6%. Licence fee was 9.0%, slightly below 9.2% a year earlier, while net revenue as a share of total revenue declined to 81.9% from 83.0%.

Which Bharti Hexacom segment contributed most to EBITDA?

Bharti Hexacom’s Mobile Services segment contributed the larger EBITDA amount, reporting Rs 1,363.5 crore in Sep-26, with an EBITDA margin of 55.4%. Segment revenue rose to Rs 2,461 crore from Rs 2,238.5 crore in Sep-25, while the margin increased by 0.6 percentage point from 54.8%.

Homes, Office and Other Services reported Rs 53.1 crore of EBITDA in Sep-26, compared with Rs 29.7 crore a year earlier. Revenue rose to Rs 131.2 crore from Rs 88 crore, and the segment EBITDA margin increased to 40.5% from 33.7%. Its operating free cash flow, defined as EBITDA less capital expenditure, remained negative at Rs 96.7 crore after capital expenditure of Rs 149.8 crore.

Mobile Services reported capital expenditure of Rs 186.5 crore and operating free cash flow of Rs 1,177 crore in Sep-26. Its customer base was 2.8968 crore, down by 16,000 customers during the quarter, while average revenue per user increased to Rs 264 from Rs 251 in Sep-25. Monthly churn was 2.6%, matching the Sep-25 level and above 2.3% in Jun-26.

Homes, Office and Other Services added 71,000 customers in Sep-26, taking its customer base to 9.89 lakh from 5.61 lakh in Sep-25. Its average revenue per user was Rs 475, below Rs 484 a year earlier, and cities covered increased to 122 from 117. The segment therefore recorded faster margin expansion than Mobile Services, but Mobile Services generated the substantially larger EBITDA and positive operating free cash flow.

How did higher EBITDA affect Bharti Hexacom’s profit and cash flow?

Bharti Hexacom reported earnings before interest and tax of Rs 816.3 crore in Sep-26, up from Rs 702.1 crore in Sep-25. Depreciation and amortization increased by Rs 46 crore to Rs 600.3 crore, comprising Rs 469.4 crore of depreciation and Rs 130.9 crore of amortization. Profit before tax increased to Rs 701.1 crore from Rs 564.1 crore as net finance cost declined to Rs 115.2 crore from Rs 138 crore.

Profit after tax before exceptional items rose to Rs 566.1 crore from Rs 421.2 crore, lifting its share of total revenue to 21.9% from 18.2%. Income-tax expense was Rs 135 crore, down from Rs 142.9 crore, as current tax expense rose to Rs 231.6 crore while deferred tax was an income of Rs 96.6 crore. Bharti Hexacom reported no exceptional item in Sep-26.

Net cash generated from operating activities was Rs 1,161.5 crore in the Sep-26 quarter, compared with Rs 1,127.5 crore in Sep-25. Operating free cash flow was Rs 1,080.3 crore after capital expenditure of Rs 336.3 crore, versus Rs 888.8 crore after Rs 367.6 crore of capital expenditure a year earlier. Net debt including lease obligations was Rs 4,950.4 crore at September 30, 2026, down from Rs 6,298.9 crore a year earlier but up from Rs 4,392.5 crore at June 30, 2026.

Conclusion

Bharti Hexacom expanded its reported EBITDA margin to 54.9% in Sep-26 as revenue increased faster than its defined operating-expense line. The defined operating-cost ratio declined 2.2 percentage points year on year to 28.6%, while Mobile Services supplied Rs 1,363.5 crore of EBITDA and Homes, Office and Other Services raised its segment margin to 40.5%.

The presentation does not disclose a management EBITDA-margin target, a cost-reduction plan or a scheduled event for assessing future margin performance. The unresolved factors to watch in subsequent reported periods are the movement in access charges, which were 8.0% of revenue in Sep-26, licence fees at 9.0%, network operations cost of Rs 561.8 crore, and capital expenditure of Rs 336.3 crore.