Bharti Hexacom Q2 FY27 Earnings Call: Churn Spike Called Temporary, Rs. 50 ARPU Gain Flowing Through (BHARTIHEXA)

Bharti Hexacom Ltd held its Q2 FY27 earnings call on November 05, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Solid Quarter, But Growth Trails the Parent

• Revenue of over Rs.2,580 crore — grew approximately 2.9% sequentially in Q2 FY 2026-2027; EBITDA came in at over Rs.1,250 crore with a margin of 48.6%.
• Mobile customer base of 29 million — with strong smartphone customer additions of 48,000 during the quarter; ARPU was Rs.264, benefiting amongst other things from one extra day in the quarter.
• Homes, offices and other businesses delivered net adds of 71,000 — resulting in sequential revenue growth of about 3.7% for that portfolio in Q2 FY 2026-2027.
• Operating free cash flow of approximately Rs.920 crore — (EBITDA minus capex) for Q2 FY 2026-2027; balance sheet remained robust with net debt excluding leases at approximately Rs.1,575 crore.
• Mobile revenue grew 2.7% QoQ — versus Bharti Airtel's 3.4% in Q2 FY 2026-2027; CFO Soumen Ray pushed back on reading the gap as structural, citing the Northeast disruption and different demographic/geographic profiles between the two entities.
• Management continues to invest — in 5G expansion, network modernization, and growing the homes and IPTV businesses.

Churn Spike Framed as Temporary; ARPU Flow-Through Intact

• Mobile subscriber additions turned negative in Q2 FY 2026-2027 — CFO Soumen Ray attributed the churn increase to the temporary customer-continuity impact of the tariff intervention and, versus peers, to very adverse weather in the Northeast that hit customer continuity badly.
• Q3 FY 2026-2027 flagged as the quarter to watch — management said early signs of significant improvement in subscriber trends are already visible versus Q2 FY 2026-2027; no quantified subscriber guidance was given.
• Net ~Rs.50 postpaid ARPU increase — from the tariff intervention executed earlier in Q2 FY 2026-2027, which the CFO said should broadly flow through to ARPU, with only minor access-charge offsets for customers on international roaming.
• ARPU lag vs Airtel explained — Ray attributed slower Hexacom ARPU growth primarily to the Northeast disruption (softer net adds, disrupted recharges), cautioning that base ARPU, customer mix and affordability differ between Hexacom and Airtel and exact numbers should not be expected to repeat across the two entities.
• Voice-only plans seen as immaterial to ARPU — Ray said the voice-only subscriber cohort is "very small" and declining, and his estimate is it will not make a significant difference to Bharti Hexacom's headline ARPU (no quantified impact provided; period unspecified).

Net Adds Decelerate Sharply; Fiber-First Pivot Underway

• Home broadband net adds decelerated from over 100,000 to around 70,000 — over the last two quarters (Q1–Q2 FY 2026-2027); CFO said customer acquisition during a period of very high competitive intensity was "inappropriate."
• Quality-led fiber pivot — Bharti Hexacom has decided to drive quality customers primarily through fiber; fiber remains a challenge in parts of the Northeast, which the company is working on.
• Management asserted the business "will certainly claw back" — with higher-quality customers at larger price points, framing the correction as a step toward reinforcing a robust home broadband business; no timeline was given for returning to prior net-adds levels.
• Access charges/IBR to be tracked on a trailing 12-month basis — Ray said if home broadband grows "a little too fast," access charges could remain somewhat higher, but home broadband is a very small part of the business; he advised looking at it directionally off trailing 12-month growth rather than the homes contribution.

Northeast Disruption Could Prove a Tailwind

• Analyst asked whether Hexacom will underperform Airtel over Q3–Q4 FY 2026-2027 — given Airtel's larger postpaid and 4G/5G bases capture greater benefit from premiumization and price increases; CFO declined forward-looking guidance.
• Northeast disruption could instead prove a tailwind — Ray noted the average customer there did 3 days fewer recharges, and said whether Hexacom's prepaid cohort leads, lags or matches Airtel will be played out competitively and is difficult to predict.
• Lower postpaid mix means lower flow-through — Ray conceded this as a percentage of top line, while noting Hexacom is moving in the direction of Airtel's very good postpaid net adds as a percentage.
• Hexacom's higher data consumption — was flagged by an analyst as outperforming peers; the unadjusted gap vs peer narrowed from ~35-40% earlier to ~20% as of Q2 FY 2026-2027, attributed by CEO Shashwat Sharma to network strengthening and upgradation of customers on plans.

Radio Capex Moderating; Reported vs Cash Capex Gap Unresolved

• Radio capex has moderated and will continue to moderate — as build-out is largely complete; new tower installations are now fewer than 1,000, in the ballpark of 500-600 sites in FY 2026-2027, with some 5G expansion continuing.
• Overall core capex expected to remain consistent with no spikes — a function of volumes and data consumption growth (a small component); transport capex for fiberization is large and will continue.
• Reported vs cash capex gap left open — Aditya Bansal (Motilal Oswal) flagged a sharp difference for Hexacom; CFO said he did not have a ready answer and committed to circle back with a response the same day (05 Nov 2026).
• Incremental capex directed at data centers and cloud — per management on the group call; the CFO declined to provide a per-megawatt capex figure, citing variability by location and design, noting India remains very competitive versus developed markets on capex per MW.

Normalization Expected in Q3; No Quantified Guidance

• Q3 FY 2026-2027 positioned as the normalization quarter — for subscriber trends following the tariff-driven churn and Northeast weather disruption; management gave no quantified subscriber guidance.
• Monetization hinges on a pricing architecture shift — CEO Shashwat Sharma said heavy consumers paying for data is a shift the industry will have to make; if achieved, it would deliver organic, consumption-led ARPU growth "for many years to come," which he called a pivotal shift.
• Home business acceleration "will take a little bit of time" — per Shashwat Sharma, with net adds currently the metric to watch as the company expands its fiber footprint; no timeline given for returning to historically high net adds.
• Dividend payouts will keep increasing over time — per management, alongside a potential continued buyback in Airtel Africa and a completed buyback in Indus (group-level capital allocation context).
• Next interaction with analysts in Q3 FY 2026-2027 — management noted the festive season (Diwali) is underway at the close of the call.