💰 Financial Performance

Revenue Growth by Segment

The company derives 100% of its turnover from Information and Communication (wired, wireless, and satellite telecommunication activities). Total revenue for FY25 reached INR 8,547.9 Cr, representing a growth of 20.6% YoY from INR 7,088.8 Cr in FY24. This growth was driven by high-quality customer acquisitions and steady improvement in ARPU.

Geographic Revenue Split

Operations are concentrated in two primary circles: Rajasthan and the North East (covering 7 states). As of March 31, 2025, the company held a subscriber market share of ~36% in Rajasthan and ~51% in the North East. Revenue is entirely domestic as the company has no international operations.

Profitability Margins

Net Profit Margin improved significantly to 17.47% in FY25 from 7.11% in FY24. EBIT margin rose to 26.5% (INR 2,265.3 Cr) from 24.7% in the previous year. The sharp increase in net profit to INR 1,493.6 Cr (up 196% YoY) was aided by an exceptional gain of INR 304.1 Cr and improved operating efficiencies.

EBITDA Margin

EBITDA margin stood at 51.15% in FY25, an increase of 1.9% YoY from 49.24% in FY24. EBITDA grew 25.3% YoY to INR 4,372.1 Cr. For Q2 FY26, the EBITDAaL margin was reported at 47.5% with an EBITDAaL of INR 1,098 Cr.

Capital Expenditure

Capital expenditure for FY25 was INR 1,473 Cr, focused on enhancing network coverage and ensuring ubiquitous connectivity. Capex productivity improved by 7.3% YoY to 63.84%.

Credit Rating & Borrowing

Crisil reaffirmed its 'Crisil A1+' rating on the company's INR 3,500 Cr Commercial Paper programme. The rating factors in the strong support from parent Bharti Airtel (Crisil AAA/Positive). Interest coverage ratio improved to 7.23x in FY25 from 6.23x in FY24.

⚙️ Operational Drivers

Raw Materials

The primary 'raw materials' for telecom services are Spectrum (radio frequencies) and Network Equipment. While specific % of total cost for equipment is not disclosed, network operating costs are the largest component of Opex. The company is transitioning to green energy, with 48% of sites being green as of March 31, 2025.

Import Sources

Network equipment and technology are sourced through group-wide procurement policies of Bharti Airtel, involving global vendors. Specific countries are not listed, but geopolitical supply chain risks are noted as a potential disruption factor.

Key Suppliers

The company enters into long-term contracts with strategic partners for network infrastructure and maintenance. Specific vendor names like Ericsson or Nokia are not explicitly mentioned in the provided text, but it operates under Bharti Airtel's group-wide procurement framework.

Capacity Expansion

The company serves 28 million revenue-earning customers as of Q2 FY26. Network expansion included adding solar energy access to 1,732 sites in FY25. Capex of INR 1,473 Cr is dedicated to further ubiquitous connectivity.

Raw Material Costs

Not applicable in a traditional manufacturing sense; however, Opex productivity improved by 1.9% YoY to 30.67% in FY25, indicating better cost management relative to revenue growth.

Manufacturing Efficiency

Capex productivity stood at 63.84% in FY25. The company focuses on indoor-to-outdoor conversion and AI/ML for energy savings to drive operational efficiency.

Logistics & Distribution

Distribution is driven by digital customer interactions and 'WoW' initiatives, focusing on online recharges and digital-first acquisition to lower physical distribution costs.

📈 Strategic Growth

Expected Growth Rate

18%

Growth Strategy

Growth is targeted through higher ARPU led by customer up-trading and tariff revisions. The company focuses on Rajasthan and the North East, which have lower-than-average mobile and internet penetration. Strategy includes network expansion (INR 1,473 Cr capex), digital tool integration for efficiency, and leveraging the 'Airtel' brand to capture high-quality customers.

Products & Services

Wireless mobile services (telecom SIM cards), wired broadband (Home subscribers), and enterprise digital services.

Brand Portfolio

Airtel (operates under the brand and group policies of Bharti Airtel Limited).

New Products/Services

Expansion of Home Broadband (Homes subscribers grew to 448,000 in FY25 from 305,000 in FY24, a 46.9% increase) and integrated digital services for enterprises.

Market Expansion

Focusing on deep rural penetration in its 7-state footprint where internet penetration remains relatively low compared to national averages.

Market Share & Ranking

Market leader in the North East with ~51% share and a strong position in Rajasthan with ~36% share.

Strategic Alliances

The company is a 70% subsidiary of Bharti Airtel Limited and follows its group-wide policies and strategic partnerships.

🌍 External Factors

Industry Trends

The industry is seeing a shift toward higher data consumption and 5G. Bharti Hexacom is positioning itself by increasing data capacity and expanding its smartphone customer base (193,000 additions in Q2 FY26).

Competitive Landscape

Faces competition from other national telecom players, but maintains resilience through superior network quality and a 50% operating profitability margin.

Competitive Moat

The moat is built on dominant market share (51% in NE), the 'Airtel' brand equity, and a robust balance sheet with Net Debt/Equity of 1.22x. These are sustainable due to high entry barriers in telecom infrastructure.

Macro Economic Sensitivity

Highly sensitive to per capita income levels in Rajasthan and the North East. Slowing economic growth directly impacts consumer spending on telecom recharges.

Consumer Behavior

Shift toward digital-first interactions, e-bills, and online recharges. The company is adapting via its 'WoW' initiatives and AI-based customer interactions.

Geopolitical Risks

Geopolitical tensions are a key risk for the supply chain of telecom hardware, potentially impacting the timeline for network expansion.

⚖️ Regulatory & Governance

Industry Regulations

Subject to TRAI regulations and Department of Telecommunications (DoT) norms. Key risks include changes in spectrum usage charges and privacy/data security regulations.

Environmental Compliance

ESG is central to strategy; costs are embedded in the transition to 48% green sites and solar expansion to 1,732 locations.

Taxation Policy Impact

Tax expense for FY25 was INR 315.2 Cr, down from INR 418.9 Cr in FY24, despite higher profits, due to tax treatments of exceptional items.

Legal Contingencies

The company (via parent BAL) faces large dues pertaining to spectrum purchase and Adjusted Gross Revenue (AGR) led liabilities. Net leverage of the parent is maintained at ~2.1x to manage these liabilities.

⚠️ Risk Analysis

Key Uncertainties

Regulatory risks (AGR/Spectrum) and technological obsolescence (transition from 4G to 5G) are primary uncertainties. Cybersecurity and data privacy are also highlighted as key strategic risks.

Geographic Concentration Risk

100% of revenue is concentrated in Rajasthan and the North East circles, making it vulnerable to regional economic or political instability.

Third Party Dependencies

Dependent on strategic partners for network maintenance and equipment; managed through group-wide Bharti Airtel contracts.

Technology Obsolescence Risk

Mitigated by continuous investment in network (INR 1,473 Cr Capex) and leveraging Bharti Airtel’s cutting-edge digital tools.

Credit & Counterparty Risk

Low risk due to the prepaid nature of the majority of the 28 million subscriber base; cash and equivalents stood at INR 17.1 Cr with short-term investments of INR 73.9 Cr.