Bharti Hexacom: Risk-Reward No Longer Attractive; Motilal Oswal Downgrades To Neutral

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Motilal Oswal Report

Since our coverage initiation in March 2025, Bharti Hexacom Ltd. has delivered 40%+ returns (vs ~15% for Bharti Airtel or Bharti) and now trades at ~19x one-year forward EV/Ebitda (or 37% premium to the implied EV/Ebitda multiple for Bharti’s India business, vs ~15% on average since Bharat Hexacom’s listing).

Given that Bharti Hexacom provides a pure-play exposure to Bharti’s fast-growing India wireless and homes business with slightly higher growth prospects, better RoCE and lower capital misallocation concerns, we had argued for a slight premium to its parent, Bharti.

However, we believe a ~40% premium is steep and risk-reward is no longer attractive. We downgrade Bharti Hexacom to Neutral with an unchanged target price of Rs 1,900.

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