Bharti Hexacom Ltd. is one of the counters in focus in trade on Thursday following a CLSA upgrade. The brokerage firm has upgraded its outlook on the telecom company from 'underperform' to 'hold', with a target price of Rs 1,510.
The brokerage said the upgrade is driven by limited near-term downside at current levels, even as it continues to prefer Bharti Airtel Ltd. over Hexacom on relative fundamentals and valuation.
Bharti Hexacom operates in just two mobile circles - Rajasthan and the North East - compared with Bharti Airtel's pan-India presence across 22 circles. Hexacom's business is heavily skewed towards mobility, with mobile services accounting for about 96% of its revenue, supported by a subscriber base of 28.4 million.
In contrast, Bharti Airtel has a much larger scale with around 369 million subscribers, with India mobile contributing 73% of India revenues and 53% of consolidated revenues. CLSA noted that Hexacom's growth has lagged Bharti Airtel's by around 3–4 percentage points in 3QFY26.
While an upcoming tariff hike is expected to accelerate Hexacom's growth rate and potentially allow it to outperform Bharti in the near term, the brokerage believes this positive is already largely priced in.
Valuation remains a key concern. Hexacom is trading at around 14x EV/Ebitda, which represents a sharp premium of 45–30% compared with Bharti Airtel's consolidated valuation and the implied sum-of-the-parts valuation for its India operations. Given the limited geographic footprint, higher valuation premium and historical growth lag, CLSA said it continues to prefer Bharti Airtel over Bharti Hexacom, despite the upgrade to a hold rating.
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