Bharti Hexacom reported consistent performance in its Q2 earnings call, with revenue at Rs. 2,317 Crores, a sequential growth of 2.4%. EBITDAAL reached Rs. 1,098 Crores, with a margin of 47.5%. The company focuses on enhancing customer experience, network expansion, and strategic capital allocation to sustain growth. Seasonality impacted customer additions, but Q3 shows positive momentum. FWA is a key technology for penetration in its circles.
Financial Performance Overview
Bharti Hexacom reported a revenue of Rs. 2,317 Crores in the second quarter, demonstrating a sequential increase of approximately 2.4%. The company’s EBITDAAL stood at Rs. 1,098 Crores, resulting in a healthy margin of 47.5%.
Customer Base and ARPU
The revenue-earning customer base reached 28 million, experiencing a slight sequential decrease. Smartphone customer additions amounted to 193,000. ARPU for the quarter was reported at Rs. 251, benefiting from an additional day in the quarter and improved portfolio mix.
Homes Business and FWA
The Homes business continues to exhibit strong momentum, driven by solid net additions. In Q2, net customer additions reached 60,000, marking the highest number in any quarter. FWA (Fixed Wireless Access) plays a crucial role in the company’s strategy, particularly in its operational circles.
Balance Sheet and Free Cash Flow
Bharti Hexacom maintains a robust balance sheet. The operating free cash flow, defined as EBITDAaL minus capex, was strong at Rs. 730 Crores. Net debt, excluding leases, is approximately Rs. 2,814 Crores, with a net debt to EBITDAaL ratio of about 0.6x.
Factors Affecting Performance
The company noted that pronounced seasonality had an impact on customer additions. However, there is optimism that this will be corrected in Q3. Rajasthan experienced significant rainfall, leading to some disruption of public services and contributing to the observed seasonality.
Strategic Outlook and Key Technologies
Bharti Hexacom remains focused on customer acquisition and delivering high-quality services. FWA is identified as an important technology for ensuring Wi-Fi penetration across its circles. The company also aims to capitalize on content-driven packs to attract and retain customers.
Bharti Airtel’s Perspective
Bharti Airtel sees growth due to its ability to attract customers with content offerings. FWA continues to play an important role in increasing Wifi penetration in both circles. It has been noted that the first adopters tend to use packs with higher prices, while the marginal customers are more likely to select lower priced packs. Despite the mix shift of the customer base that can affect the ARPU, the customer lifetime value continues to be high.
Source: BSE
