Bharti Hexacom Q1 FY27 Results (NSE: BHARTIHEXA)
Signal: Margin expansion
The read
Bharti Hexacom delivered a solid Q1 with double-digit revenue and PAT growth. EBITDA margin expanded 216bps YoY to 55.6% as cost efficiencies (lower S&M, slower network OPEX) more than offset higher access charges. The homes segment revenue surged 61.4% YoY, though it slipped to a small loss – a watch item. Overall, operating leverage and stable finance costs drove PAT growth ahead of revenue, supporting a positive trajectory.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹2,509.9 Cr | 10.9% | 4.0% |
| EBIT | ₹801.8 Cr | 17.8% | |
| Net profit | ₹482.4 Cr | 23.2% | |
| EPS | ₹9.65 | 23.2% | |
| EBIT margin | 55.6% |
P&L walk
Revenue grew 10.9% YoY driven by mobile services (+9.3%) and strong homes segment (+61.4%). EBITDA margin expanded 216bps YoY to 55.6% as network expenses (+3.0%) and sales & marketing (-10.6%) grew slower than revenue, though access charges (+25.2%) were a drag. Depreciation rose 12.4% in line with network capex. Finance costs declined 3.4% YoY. PAT grew 23.2% YoY, outpacing EBITDA, aided by lower interest costs.
Segments
Mobile Services remains the primary driver with 95% of revenue and a segment PBIT of ₹7,828 million (+13.7% YoY), while Homes & Other Services recorded a marginal loss of ₹4 million vs a profit of ₹14 million in Q1FY26.
Key positives
- Revenue grew 10.9% YoY, with mobile services up 9.3% and homes/broadband surging 61.4%.
- EBITDA margin expanded 216bps YoY to 55.6% – operating leverage as network expenses grew only 3% and S&M declined 10.6%.
- EBITDA grew 15.4% YoY vs revenue 10.9%: all four gates of operating leverage passed (EBITDA +15.4% vs rev +10.9%, 450bps gap; prior-year EBITDA positive; margin expansion >100bps).
- PAT up 23.2% YoY, aided by lower finance costs (-3.4%); EPS tracks PAT with no dilution.
- Sales & marketing expenses down 10.6% YoY – continued cost discipline.
Key concerns
- Access charges grew 25.2% YoY, significantly outpacing revenue – likely driven by higher data traffic/ interconnect costs.
- Homes segment turned to a loss of ₹4 million vs profit of ₹14 million a year ago – though small, it bears watching as the segment scales.
- QoQ EBITDA margin dipped 17bps, though nominal.
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