The brokerage views the company as the best pure-play in the Indian communication solutions market. Bharti Hexacom operates in underpenetrated areas with low telecom density and internet penetration, which is driving subscriber growth and increasing average revenue per user (ARPU). Despite a slightly lower ARPU compared to Bharti Airtel, the company is expected to deliver superior returns. The broker forecasts tariff hikes and decreasing capital expenditures, leading to increased dividend payouts. Overall, the brokerage expects strong revenue and EBITDA growth for the company.
Last week another global brokerage also initiated coverage on Bharti Hexacom with a 'buy' call and a target price of Rs 1,240.
Bharti Hexacom runs mobile services in Rajasthan and the Northeast telecommunication circles of India, comprising Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura. The company offers its services under the brand Airtel.
The company’s standalone net profit jumped 10.25% to Rs 223 crore in Q4 FY24 as compared with Rs 202 crore in Q4 FY23. Revenue from operations increased 7.8% to Rs 1,868 crore during the quarter as compared with Rs 1,733 crore posted in the quarter ended 31 March 2023. Profit before tax (PBT) jumped 11.5% YoY to Rs 301 crore in Q4 FY24.