Bharti Hexacom has moved from losses triggered by telecom industry disruption and adjusted gross revenue (AGR) liabilities to a profitable business generating thousands of crores in operating cash flow, supported by higher customer revenue and lower capital expenditure.
From Losses to a Stronger Financial Position
Founded in 1995, Bharti Hexacom initially operated in just two telecom circles—Rajasthan and the North East. The company faced significant financial pressure after an intense price war transformed India's telecom market from 2016 onwards.
Aggressive pricing by a new market entrant pushed tariffs lower and kept industry revenues under pressure for several years.
The situation became more challenging following the Supreme Court's 2019 AGR ruling, which required telecom companies to make substantial payments towards statutory dues. Bharti Hexacom paid around ₹500 crore in AGR-related dues in 2020, adding to the financial strain.
The combined impact contributed to losses during FY20 and FY21.
Focus Shifted From Subscriber Numbers to Revenue
Rather than simply pursuing subscriber growth, Bharti Hexacom increasingly focused on moving customers towards smartphones and higher-value data services.
This strategy helped increase the company's average revenue per user (ARPU) from around ₹155 in FY22 to more than ₹250 by FY26.
The improvement meant that the company could generate more revenue from its existing customer base instead of relying solely on acquiring additional subscribers.
Broadband Becomes Another Growth Driver
Bharti Hexacom has also been expanding beyond its traditional mobile business through home broadband and fixed wireless services.
Although the segment remains relatively small compared with mobile operations, it has recorded rapid growth from a lower base, providing the company with another source of revenue.
Lower Capex Improves Cash Generation
As the company's 4G network rollout matured, its capital expenditure requirements declined significantly.
Capex fell from around 29% of revenue to approximately 16% by FY26. This reduction allowed a larger portion of operating earnings to convert into cash.
The company's customer payment cycle also supports cash generation. With customers generally paying within a short period, the additional cash generated through higher revenue and lower capital expenditure is reflected relatively quickly in the company's finances.
Bharti Hexacom's debtor days declined to just four days in FY26, indicating a very short collection cycle.
₹4,464 Crore Operating Cash Flow in FY26
The combination of higher customer revenue, lower capital expenditure and efficient collections helped Bharti Hexacom generate ₹4,464 crore in operating cash flow during FY26.
The company reported revenue of ₹9,354 crore and a profit of ₹1,733 crore for the year.
The improved cash position also helped the telecom company reduce its dependence on additional borrowing.
Debt Falls as Cash Generation Strengthens
Bharti Hexacom's net debt declined from ₹3,689 crore to ₹2,030 crore in one year.
The shift demonstrates how the company has gradually moved from managing significant financial pressure to generating enough internal cash to support its operations, invest in growth and reduce debt.
The transformation has been driven by a combination of higher revenue per customer, expansion into broadband services, lower network-related capital expenditure and faster cash collections.
For Bharti Hexacom, the financial journey reflects how improving unit economics and disciplined investment can significantly change the cash profile of a telecom business after years of industry-wide pricing and regulatory pressure.
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