Motilal Oswal sees strong growth potential in Bharti Hexacom on wireless and broadband expansion

Bharti Hexacom shares have fallen 8 percent since the start of the year.

Motilal Oswal sees Bharti Hexacom as a strong play on India's wireless growth, offering direct exposure to Airtel’s expanding businesses in mobile and home broadband. The brokerage firm noted that lower teledensity and internet penetration in Hexacom’s operating circles, compared to the national average, create opportunities for faster subscriber growth and higher average revenue per user (ARPU).

With fixed broadband adoption still low in these regions, the ramp-up of fixed wireless access (FWA) services could further accelerate growth in Hexacom’s wired broadband segment. The company operates in circles that account for nearly 6 percent of India’s GDP and 7 percent of its population, but telecom penetration remains lower than the national level.

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Motilal Oswal highlighted that this gap provides a longer runway for expansion as more users transition to data plans, leading to ARPU improvements. The brokerage also pointed to Hexacom’s competitive positioning, noting that its circles are more consolidated than the rest of India, allowing for better pricing power and lower customer acquisition costs—factors that could support margin expansion.

Hexacom has benefited from Airtel’s focus on premiumisation, which includes upgrading non-data users to data, shifting prepaid subscribers to postpaid, and bundling services for higher-value customers. This strategy has helped Hexacom achieve the highest ARPU in its operating regions, supported by tariff adjustments and an increase in data subscriber penetration from 56 percent in FY21 to 76 percent by the first nine months of FY25.

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Motilal Oswal expects Hexacom to deliver an EBITDA CAGR of 23 percent over FY24-27, driven by a projected 13 percent wireless ARPU CAGR, supported by an estimated 15 percent increase in base plan pricing from December 2025. The firm also sees market share gains, strong incremental margins of 75 percent, and the expansion of FWA services contributing to overall growth. Scenario analysis suggests a 41 percent upside in a bullish case, with a target price of Rs 1,875 based on a 20 percent tariff hike in December 2025 and a 7 percent ARPU CAGR over FY27-34.

In a bearish scenario, the stock could see a more modest 13 percent downside to Rs 1,150, assuming a lower 10 percent tariff hike and a 5 percent ARPU CAGR over the same period.

At about 10:15 am, shares of the company were trading at Rs 1,337, lower by 0.5 percent from the last close on the NSE. Bharti Hexacom shares have fallen 8 percent since the start of the year.