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Bharti Airtel’s 2QFY26 consolidated financials are not strictly comparable on a YoY basis, as the company consolidated Indus Towers (Indus) from midNovember 2024.

* Overall, Bharti reported a strong 2QFY26, with better-than-expected performance across key segments. India wireless revenue grew 3% QoQ (higher ARPU offset by muted net adds), but EBITDA grew ~4% QoQ (2% above our estimate), driven by continued margin expansion (94% incremental margins QoQ). The Homes segment continues to benefit from an acceleration in subscriber additions. Meanwhile, the Enterprise segment’s revenue grew (after the exit of low-margin business) and margins remained elevated (though 100bp lower QoQ). Airtel Africa continued to post strong double-digit CC revenue and EBITDA growth, with a further boost from favorable FX movements. After low capex in 1Q, it picked up in 2Q (with India wireless capex up 7% YoY). FCF remained robust at INR142b (~INR285b in 1HFY26), though net debt (excl. leases) inched up marginally ~INR12b QoQ on account of dividend payments.

Good 2Q; Strong margin performance across key segments

* Consolidated revenue at INR521b (+26% YoY, our est. INR510b) rose 5% QoQ, driven by robust growth in Africa (+13% QoQ) and Home broadband business (+8.5% QoQ).

* India revenue (including Indus) grew 3% QoQ to INR387b (+11% YoY) and was slightly above our estimate, largely driven by better India Wireless (+2.6% QoQ) and Enterprise (+4% QoQ).

* Consolidated EBITDA at INR296b (35% YoY, 3% above) increased 6% QoQ, driven by robust performance in Airtel Africa (+15.5% QoQ), Home Broadband (+9% QoQ), and India Wireless (+4% QoQ).

* India EBITDA (including Indus) at INR232b (+3.8% QoQ, 12% YoY) was ~3% above our estimate, driven by improved performance in India Wireless (2% above) and Airtel Business (7% above) as well as the reversal of bad debt provisions for Indus Towers.

* Reported EBITDA margin expanded ~40bp QoQ to 56.7% (+400bp YoY) and was ~50bp ahead of our estimate, driven by better margins in India wireless, Enterprise, and Airtel Africa.

* Reported PBT (before share of JVs) at INR122b (+18% QoQ, +2.16x YoY) was 9% ahead of our estimate, driven by better EBITDA and lower net finance cost (-16% QoQ, likely on favorable FX movement in Africa).

*Reported attributable PAT at INR67.9b (5% beat) grew 14% QoQ (+89% YoY on a low base) due to higher EBITDA and lower interest expenses.

* Adjusted for exceptional items in the past quarters, PAT at INR67.9b grew 74% YoY.

FCF generation healthy at INR146b; net debt marginally higher QoQ due to dividend payouts

* After lower capex in 1Q, consolidated capex at INR114b (+37% QoQ, +26% YoY) picked up pace. India capex (ex-Indus) at INR71b rose ~33% QoQ (+16% YoY), but was ~4% below our estimate.

* Bharti Airtel’s consolidated free cash flow (after leases and interest payments) was stable QoQ at INR146b (vs. ~INR143b QoQ), driven by better operational performance (OCF pre-WC changes rose 6% QoQ) and lower interest outgo (- 22% QoQ).

* Bharti Airtel’s consolidated net debt (ex-leases) inched up ~INR12b QoQ to INR1.267t (vs. INR1.255t QoQ) as robust FCF was utilized in dividend payments. Including the impact of leases, Bharti Airtel’s consolidated net debt increased ~INR31b QoQ to INR1.95t (vs. INR1.92t QoQ).

* The company’s consolidated net debt (including leases) to EBITDA (annualized) declined to 1.63x (vs. 1.7x QoQ). India SA’s net debt to EBITDA moderated to 1.57x (vs. 1.62x QoQ).

* Excluding the lease impact, the company’s net debt to EBITDAaL dipped to 1.19x (vs. 1.26x QoQ) for the consolidated business and 1.32x (vs. 1.35x QoQ) for India SA

India Wireless: Strong show with continued benefits of premiumization, margin expansion continues with 94% incremental EBITDA margins

* Bharti’s India Wireless ARPU at INR256 (+10% YoY, our est. INR253) rose 2.2% QoQ (vs. +1.3% QoQ for RJio at INR211), driven by subscriber mix improvement and one extra day QoQ.

* However, the company’s subscriber net adds remained subdued at 1.4m, with paying net adds (vs. 1.2m net adds QoQ, ~5.3m wireless net adds for RJio), and was weaker than our estimate of ~3m.

* The subscriber mix continues to improve as Bharti added further ~0.95m postpaid net adds (+3.6% QoQ, 12% YoY). Further, the company’s 4G/5G net additions remained resilient at 5.1m (improvement on ~3.9m 4G net adds QoQ).

* Bharti’s India Wireless revenue rose 2.6% QoQ (vs. 3.2% QoQ for RJio, including FTTH) to INR281b (+11% YoY, our est. INR279b).

* India Wireless EBITDA rose 4.2% QoQ (vs. 3.5% QoQ for RJio including FTTH) to INR169.5b (20% YoY, our est. INR166b).

* Reported wireless EBITDA margin further expanded ~90bp QoQ to 60.3% (+325bp YoY, vs. +20bp QoQ for RJio to 54.2%) and was 90bp ahead of our estimate.

* Incremental margin came in at ~94% (vs. ~67% in 1QFY26 and ~60% for RJio and our estimate).

* India wireless capex increased ~33% QoQ (on a low base) to INR43b (+27% YoY), but was ~7% below our estimate.

Homes: In-line results; robust net adds partly offset by continued ARPU declines

* Bharti’s Homes BB net adds accelerated further to ~950k (vs. ~940k QoQ, our estimate of ~975k net adds) to reach ~11.9m subs (+40% YoY), likely due to the ramp up of FWA services.

* Reported ARPU decline continued with further ~1% QoQ dip to INR534/month (- 6% YoY, though better than our est. INR530).

* Homes revenue rose 8.5% QoQ to INR18.6b (+30% YoY, inline). Homes EBITDA at INR9.3b (+9% QoQ, 30% YoY) was also in line with our estimate.

* EBITDA margin expanded ~5bp QoQ to 50.1% (-25bp YoY) and was ~25bp below our estimate.

* Capex in the Homes Business remained elevated and increased ~2x YoY to INR18.6b (+28% QoQ, 26% higher than our estimate), likely on the ramp up of FWA offerings.

Enterprise: Revenue growth picks up, 7% EBITDA beat as margins remain elevated

* Airtel Business (Enterprise) revenue grew ~4% QoQ to INR52.8b (-7% YoY due to the exit of lower-margin business, vs. our est. INR51b).

* EBITDA at INR21.9b rose ~2% QoQ (+9% YoY) and was ~7% above our estimate, as EBITDA margins contracted ~100bp QoQ to 41.6% (but remained above our estimate of 40%, and 36.3% YoY).

* Capex for the Airtel business stood at INR7.7b (+5% QoQ, -15% YoY).

Other businesses: Sustained strong growth in Africa, DTH continued to face headwinds

* Airtel DTH’s revenue at INR7.5b declined ~1% QoQ (-1% YoY) as subscriber trends were weaker with 341k net declines (vs. 204k QoQ net declines in 1QFY26, our est. 200k net declines). ARPU rose ~1% QoQ at INR163 (+3% YoY, our est. INR162). DTH EBITDA at INR3.7b (-6% QoQ, -14% YoY) was ~5% below as margins contracted ~225bp QoQ to 48.6% (-730bp YoY and ~205bp below our estimate).

* Airtel Africa (AAF) continued to report strong double-digit YoY CC growth. AAF’s reported revenue (in rupee terms) rose ~13% QoQ (+35% YoY, 4% ahead), while EBITDA increased ~16% QoQ (42% YoY, ~7% beat), driven by the flow-through of tariff hikes in Nigeria and favorable FX movements.

Other highlights: Data volume surge on IPL boost; tower additions moderate further

* Data volume for the India Wireless business rose ~7% QoQ (vs. 8% QoQ in 1QFY26, +7% QoQ for RJio, including FTTH), while data usage per sub improved to 28.3GB/month (vs. 26.9GB QoQ, 38.8GB/month reported by RJio, including FTTH).

* Voice usage on network in India Wireless rose ~1% QoQ (vs. -1% QoQ in 1QFY26 and similar to RJio), with minute of usage (MoU) per subscriber marginally rising to 1,145mins (vs. 1,143min QoQ and 996mins for RJio).

* Bharti’s tower additions improved to ~3.5k towers QoQ (vs. 1.8k in 1QFY26), bringing the total tower count to ~343k. Meanwhile, revenue per site inched up 2% QoQ to INR272.5k/month (+9% YoY)

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