Bharti Hexacom Q2 profit rises 34% on margin, finance gains

Bharti Hexacom Limited reported net income of Rs 566.1 crore for the quarter ended September 30, 2026, up 34% year-on-year from Rs 421.2 crore, as revenue increased 11%, EBITDA margin rose to 54.9% and net finance cost declined 17%. No exceptional items were reported in either comparable quarter.

Why did Bharti Hexacom's Q2 profit rise faster than revenue?

Bharti Hexacom's net income grew faster than revenue because operating earnings, finance costs and tax expense all moved favourably in the September 2026 quarter. Revenue rose 11% to Rs 2,581.8 crore, EBITDA increased 13% to Rs 1,416.6 crore, and profit before tax increased 24% to Rs 701.1 crore from Rs 564.1 crore a year earlier.

The reported 34% increase was not affected by exceptional items. Net income before exceptional items and after exceptional items was Rs 566.1 crore in Q2 FY27, compared with Rs 421.2 crore in Q2 FY26, because the company reported no exceptional items in either period. Income tax expense declined 6% to Rs 135 crore from Rs 142.9 crore despite the increase in profit before tax.

How did Bharti Hexacom's operating margin change?

Bharti Hexacom's earnings before interest, tax, depreciation and amortisation, or EBITDA, margin increased by 0.7 percentage points to 54.9% in Q2 FY27 from 54.2% in Q2 FY26. EBITDA rose by Rs 160.2 crore to Rs 1,416.6 crore, outpacing revenue growth, while earnings before interest and tax, or EBIT, rose 16% to Rs 816.3 crore and its margin increased to 31.6% from 30.3%.

The margin change coincided with operating expenses growing more slowly than revenue. Total operating expenses increased 9% to Rs 1,204.7 crore, while operating expenditure excluding access charges, cost of goods sold, licence fees, and charity and donation increased 3.3% to Rs 737.9 crore. That adjusted operating-cost category represented 28.6% of revenue, down from 30.8% a year earlier, and sales and marketing expense fell 11% to Rs 86 crore.

The sequential figures show a smaller further increase in EBITDA margin. Revenue increased from Rs 2,509.9 crore in the June 2026 quarter to Rs 2,581.8 crore in September 2026, while EBITDA increased from Rs 1,374.9 crore to Rs 1,416.6 crore. EBITDA margin moved from 54.8% to 54.9%, while EBIT margin rose from 30.7% to 31.6%.

Which business segments drove Bharti Hexacom's revenue growth?

Bharti Hexacom's Mobile Services business remained the principal contributor, reporting Q2 FY27 revenue of Rs 2,461 crore, up 10% year-on-year from Rs 2,238.5 crore. Segment EBITDA increased 11% to Rs 1,363.5 crore and the EBITDA margin rose by 0.6 percentage points to 55.4%. Mobile operating free cash flow, defined by the company as EBITDA less capital expenditure, rose 20% to Rs 1,177 crore.

Homes, Office and Other Services expanded faster from a smaller base, with revenue increasing 49% to Rs 131.2 crore from Rs 88 crore. Segment EBITDA rose 79% to Rs 53.1 crore and margin increased by 6.7 percentage points to 40.5%. Capital expenditure of Rs 149.8 crore exceeded EBITDA, however, resulting in negative operating free cash flow of Rs 96.7 crore, compared with negative Rs 95.7 crore a year earlier.

Mobile average revenue per user, or ARPU, reached Rs 264, up 5.4% from Rs 251, while the mobile customer base increased 3.3% to 28.968 million. Homes, Office and Other Services customers increased 76.1% to 989,000, including 71,000 net additions during the quarter. ARPU in that segment declined 1.9% to Rs 475 from Rs 484.

What operating measures supported Bharti Hexacom's Q2 performance?

Bharti Hexacom reported a total customer base of 29.957 million at September 30, 2026, up 4.8% from 28.598 million a year earlier. Mobile data traffic increased 30.6% to 2,649 million gigabytes, and average data usage per customer rose 23.9% to 38.1 gigabytes per month from 30.7 gigabytes.

The smartphone data customer base rose to 23.119 million from 21.967 million and represented 80.0% of mobile customers, compared with 78.6% a year earlier. Mobile voice minutes rose 2.6% to 96,119 million minutes, while voice usage per customer per month declined 0.5% to 1,105 minutes. The mobile customer base declined by 16,000 sequentially and monthly churn rose to 2.6% from 2.3% in June 2026.

Network capacity also expanded. Bharti Hexacom had 26,940 network towers at quarter-end, 411 more than in September 2025, and 97,176 mobile broadband base stations, up 4,721 year-on-year. Its homes operation covered 122 cities including local cable operators, compared with 117 cities a year earlier, and the company enhanced Rs 999-and-above family postpaid plans with Apple iCloud+, Apple TV and Apple Arcade access.

How did finance costs and debt affect Bharti Hexacom's earnings?

Bharti Hexacom's net finance cost fell by Rs 22.8 crore to Rs 115.2 crore in Q2 FY27 from Rs 138 crore a year earlier. Interest on borrowings and finance charges declined to Rs 77 crore from Rs 80.7 crore, interest on lease obligations fell to Rs 65.1 crore from Rs 67.9 crore, and investment income increased to Rs 24.3 crore from Rs 4.9 crore.

Net debt including lease obligations stood at Rs 4,950.4 crore on September 30, 2026, down 21% from Rs 6,298.9 crore a year earlier. Net debt excluding lease obligations declined 44% to Rs 1,575.5 crore. The annualised net-debt-to-EBITDA ratio including leases was 0.87 times, compared with 1.25 times a year earlier, while interest coverage increased to 12.09 times from 9.92 times.

Quarterly capital expenditure declined 9% to Rs 336.3 crore, producing operating free cash flow of Rs 1,080.3 crore, up 22% from Rs 888.8 crore. For the six months ended September 2026, capital expenditure rose 21% to Rs 718.5 crore and operating free cash flow rose 10% to Rs 2,073 crore. This difference reflects a higher first-quarter investment rate than in the September quarter.

Conclusion

Bharti Hexacom's Q2 FY27 profit increase reflected revenue growth, a 0.7-percentage-point rise in EBITDA margin, lower net finance cost and lower reported income tax expense, rather than an exceptional item. Mobile Services supplied most revenue and operating free cash flow, while Homes, Office and Other Services delivered higher revenue growth but continued to require capital expenditure above its EBITDA.

The next reported periods will show whether mobile ARPU can build on Rs 264 while monthly churn remains at 2.6%, and whether the homes business can narrow its negative operating free cash flow of Rs 96.7 crore. Bharti Hexacom states that it continues to invest in network expansion, technology advancement and spectrum, following an increase in mobile broadband base stations to 97,176 and homes coverage to 122 cities by September 30, 2026.