Target: ₹1,625

CMP: ₹1,335.70

Bharti Hexacom (Hexacom), the licensed operator of wireless and fixed-line services under the Airtel brand in Rajasthan and North East circles, provides pureplay exposure to the two high-growth businesses of Airtel – India wireless and Home broadband. Moreover, given lower teledensity and lower internet penetration in Hexacom circles (vs. pan-India), we believe Hexacom can potentially grow a few percentage points faster than Airtel on both subscribers and ARPU.

Further, with significantly lower penetration of fixed broadband in Hexacom’s circles and the recent ramp-up of Fixed Wireless Access (FWA) offerings, we believe Hexacom’s wired broadband business could also grow at a faster clip.

We initiate coverage on Hexacom with a Buy rating and a TP of ₹1,625, premised on 13x FY27E EV/EBITDA (on par with our Airtel’s India wireless multiple). Our preference for Hexacom over Airtel is largely driven by lower capital misallocation concerns.

Our scenario analysis indicates a favourable risk-reward for Hexacom with about 41 per cent upside in our bull case TP of ₹1,875, premised on a 20 per cent tariff hike in Dec’25, followed by about 7 per cent ARPU CAGR over FY27-34 and a modest 13 per cent downside in our bear case TP of ₹1,150, which is premised on 10 per cent tariff hike in Dec’25, followed by around 5 per cent ARPU CAGR over FY27-34.