Why Did Bharti Hexacom's Q1 Profit Decline by 23%?
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Synopsis
Bharti Hexacom's Q1 FY26 results reveal a steep 23.4% decline in net profit year-on-year, despite an impressive 18.4% increase in revenue. This article explores the contrasting financial outcomes and what they could mean for the telecom giant's future.
Key Takeaways
- Net profit decreased by 23.4% YoY
- Revenue increased by 18.4% YoY
- Operating profit rose by 32% YoY
- Mobile revenue grew by 17.8% YoY
- Shares dropped slightly but increased significantly year-to-date
New Delhi, Aug 5 (NationPress) The prominent telecom company Bharti Hexacom Ltd experienced a 23.4% year-on-year (YoY) decline in net profit during the first quarter of FY26, despite a notable increase in revenue, according to an exchange filing made on Tuesday.
For the April-June quarter, the firm reported a net profit of Rs 391.6 crore, a drop from Rs 511.2 crore in the same quarter last year.
In comparison to the previous quarter, net profit fell by over 16% from Q4 FY25, which was Rs 468.4 crore.
On a positive note, due to robust operational performance, total revenue surged 18.4% YoY to Rs 2,310.5 crore in Q1 FY26 from Rs 1,950.5 crore in Q1 FY25.
However, revenue saw a significant decline from Rs 3,336.8 crore in Q4 FY25, indicating a potential seasonal or one-time peak in the prior quarter.
The operating profit stood at Rs 1,208.2 crore in Q1 FY26, marking a 32% YoY increase from Rs 915.7 crore in Q1 FY25. Operating profit is calculated before accounting for depreciation, amortization, finance costs, exceptional items, and taxes.
Sequentially, this figure remained almost stable and was slightly lower than the Rs 1,215.6 crore reported in Q4 FY25.
In Q1 FY26, the total expenses were marginally below Rs 1,121.2 crore from the previous quarter, and increased slightly to Rs 1,102.3 crore from Rs 1,034.8 crore a year earlier, indicating some efforts towards cost optimization.
According to the filing, the company’s mobile revenue rose by 17.8% YoY, attributed to tariff adjustments and a focus on enhancing the premium segment of its portfolio.
In market performance, the shares of Bharti Hexacom ended in the negative in Tuesday's trading session. The stock closed at 1,855.40, reflecting a 0.19% decline. Over the last five days, the stock witnessed nearly a 4% increase, and has surged over 25% year-to-date.
Point of View
I see Bharti Hexacom's financial results as a reflection of the current challenges faced by telecom operators. While the dip in net profit raises eyebrows, the growth in revenue indicates resilience and potential for recovery. This duality will be crucial for investors and stakeholders to monitor moving forward.
NationPress
05/10/2025
Frequently Asked Questions
What caused Bharti Hexacom's profit decline?
The profit decline was primarily due to various factors including increased operational costs and market competition, despite a rise in revenue.
How much did revenue increase for Bharti Hexacom?
Revenue for Bharti Hexacom increased by 18.4% year-on-year, reaching Rs 2,310.5 crore.
What was the operating profit for Q1 FY26?
The operating profit was reported at Rs 1,208.2 crore, which is a 32% increase from the previous year.
How did the shares of Bharti Hexacom perform recently?
The shares closed at 1,855.40, down 0.19%, but have seen a significant increase of over 25% year-to-date.
What impact did tariff adjustments have on revenue?
Tariff adjustments contributed to a significant increase in mobile revenue, which rose by 17.8% year-on-year.
