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Bharti Hexacom rallies 10% in 2 days, stock hits record high; here's why

Bharti Hexacom share price hit a new high of ₹1,665, gaining 5 per cent on the BSE in Monday's intraday trade. The stock has rallied 10 per cent in the past two trading days and is quoting higher for the seventh straight trading day. The stock price of the telecom - cellular & fixed line services provider has surged 18 per cent during the period. Bharti Hexacom is a subsidiary company of telecom services major Bharti Airtel. On April 9, 2025, the company informed the stock exchanges that Telecommunications Consultants India Limited (TCIL), a significant shareholder of Bharti Hexacom, has requested the company to start a fresh process for the sale of its infrastructure business to Indus Towers. TCIL is a public sector undertaking and the said move will meet the requirements of TCIL as a Public Sector Undertaking. "The management and the board of Bharti Hexacom remain convinced about the business logic and merit of the proposal. However, in keeping with the highest standards of corporate governance and transparency, it has been agreed to put the current proposal in abeyance and undertake a fresh exercise in consultation with TCIL," the filing read. Bharti Hexacom clears high-cost debt pertaining to 2024 auctions On March 26, Bharti Airtel (Airtel) and its subsidiary Bharti Hexacom prepaid additional ₹5,985 crore to the Department of Telecom, thereby fully prepaying the high-cost interest liabilities of 8.65 per cent pertaining to the 2024 auctions. Airtel's subsidiary Network i2i Ltd. has also voluntarily called and redeemed $1 billion in Perpetual Notes. Underscoring its commitment to financial prudence, operational efficiency, and its strong capital position, Airtel continues to prepay its high-cost spectrum liabilities, lowering its debt and cost of debt. The prepayments have resulted in Airtel clearing ₹1.16 trillion of scheduled installments that would have otherwise been payable on their respective dates over the original tenure of the liabilities. Consequently, Airtel has also lowered its cost of debt on spectrum liabilities to an average of approximately 7.22 per cent on the residual ₹52,000 crore of spectrum liabilities (excluding AGR liabilities). The residual spectrum liabilities carry a long repayment profile payable in annual installments until FY 2042. Motilal Oswal Financial Services on Bharti Hexacom Given the lower teledensity and lower internet penetration in Hexacom circles (vs. pan-India), Motilal Oswal Financial Services (MOFSL) believe Hexacom can potentially grow a few percentage points faster than Airtel on both subscribers and average revenue per user (Arpu). Further, with significantly lower penetration of fixed broadband in Hexacom's circles and the recent ramp-up of Fixed Wireless Access (FWA) offerings, the brokerage believes Hexacom''s wired broadband business could also grow at a faster clip. The brokerage firm builds in ~23 per cent Ebitda compound annual growth rate (CAGR) over FY24-27 for Hexacom, driven by ~13 per cent wireless Arpu CAGR on account of ~15 per cent (or ₹50/month) increase on the base plan from December 2025, continued market share gains, robust ~75 per cent incremental margins, and ramp-up of fixed wireless access (FWA) services, given the lower penetration of Home Broadband in Hexacom circles. Given its slightly higher growth, superior return ratios, and lower capital misallocation overhangs, MOFSL believes Hexacom could continue to trade at a premium to Bharti's India business. However, the stock is trading above the brokerage firm's target price of ₹1,625 per share. About Bharti Hexacom Bharti Hexacom is a communications solutions provider offering consumer mobile services, fixed-line telephone and broadband services to customers in the Rajasthan and the North East telecommunication circles in India, which comprises the states of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland and Tripura. It offers services under the brand 'Airtel'. Airtel is a global communications solutions provider with over 550 million customers in 17 countries across South Asia and Africa.