Bharti Hexacom Ltd Downgraded to Sell Amid Mixed Financials and Bearish Technicals

Quality Assessment: Strong Operational Metrics Amidst Moderate Market Capitalisation

Bharti Hexacom continues to demonstrate solid operational quality, supported by consistent profitability and efficient capital utilisation. The company’s Return on Capital Employed (ROCE) stands at an impressive 20.3%, signalling effective deployment of capital to generate earnings. Additionally, the debt-equity ratio remains low at 1.06 times for the half-year period, indicating a conservative leverage position relative to industry peers.

Operating profit growth has been particularly noteworthy, with an annualised increase of 147.86%, underscoring the company’s ability to expand earnings before interest and taxes at a rapid pace. The latest six-month Profit After Tax (PAT) of ₹812.80 crores reflects a robust growth rate of 68.56%, further reinforcing the company’s operational strength. Moreover, the operating profit to interest coverage ratio of 8.01 times highlights strong interest servicing capacity, reducing financial risk.

Despite these positives, the company’s Mojo Score remains moderate at 48.0, with a Mojo Grade downgraded to Sell from Hold. The Market Cap Grade is rated at 2, reflecting a mid-cap status that may limit liquidity and investor interest compared to larger telecom peers.

Valuation: Elevated Multiples Despite Discount to Peers

Bharti Hexacom’s valuation metrics present a mixed picture. The company trades at an enterprise value to capital employed ratio of 7, which is considered very expensive relative to historical averages. This elevated valuation suggests that the market has priced in significant growth expectations. However, when compared to its peer group, the stock is trading at a discount to average historical valuations, indicating some relative value remains.

The Price/Earnings to Growth (PEG) ratio of 0.7 further supports the notion that the stock is attractively valued on a growth-adjusted basis. This low PEG ratio implies that earnings growth is not fully reflected in the current price, which could be a positive signal for long-term investors.

Nevertheless, the recent price performance has been volatile. The stock closed at ₹1,615.00 on 26 January 2026, down 0.62% from the previous close of ₹1,625.10. It remains well below its 52-week high of ₹2,051.00 but comfortably above the 52-week low of ₹1,225.00, reflecting a wide trading range over the past year.

Financial Trend: Robust Profit Growth and Market-Beating Returns

Bharti Hexacom’s financial trend remains encouraging, with consistent positive quarterly results over the last five quarters. The company’s PAT growth of 76% over the past year is a testament to its improving profitability and operational efficiency. This strong earnings momentum has translated into market-beating returns, with the stock delivering a 22.76% gain over the last 12 months, significantly outperforming the Sensex’s 6.56% return during the same period.

However, shorter-term returns have been less favourable. The stock has declined 10.57% over the past month and 11.3% year-to-date, underperforming the Sensex’s respective declines of 4.66% and 4.32%. This recent weakness may reflect broader market volatility or sector-specific headwinds.

Longer-term growth prospects remain intact, supported by a healthy operating profit growth rate and a stable capital structure. The company’s majority ownership by promoters provides strategic stability and alignment with shareholder interests.

Technicals: Shift from Mildly Bullish to Mildly Bearish Signals Downgrade

The primary catalyst for the downgrade to Sell is the deterioration in technical indicators, which have shifted from mildly bullish to mildly bearish on a weekly and monthly basis. Key technical metrics reveal a mixed but predominantly negative outlook:

• MACD on the weekly chart is bearish, signalling downward momentum, while the monthly MACD remains neutral.


• RSI is bullish on the weekly timeframe but shows no clear signal monthly, indicating short-term strength but lack of sustained momentum.


• Bollinger Bands suggest mild bearishness weekly but mild bullishness monthly, reflecting recent price consolidation with potential volatility.


• Daily moving averages are bearish, confirming short-term downtrend pressures.


• KST (Know Sure Thing) indicator is bearish weekly, with no monthly signal, reinforcing the weakening trend.


• Dow Theory analysis shows mildly bearish trends on both weekly and monthly charts, indicating a cautious outlook.


• On-Balance Volume (OBV) is mildly bearish weekly but bullish monthly, suggesting mixed volume support for price movements.

These technical signals collectively point to a weakening price momentum, which has prompted the downgrade despite the company’s strong fundamentals. The downgrade reflects a prudent stance to manage risk amid uncertain near-term price action.

Market Context and Comparative Performance

Bharti Hexacom’s performance relative to the broader market and sector peers provides additional context for the rating change. Over the past year, the stock’s 22.76% return has outpaced the BSE500 index’s 5.14% gain, highlighting its ability to deliver superior returns in a challenging environment. However, the stock’s recent underperformance over one month and year-to-date periods signals caution for investors.

The telecom services sector remains competitive, with evolving technology trends and regulatory dynamics influencing valuations and investor sentiment. Bharti Hexacom’s current valuation premium and technical weakness suggest that investors may prefer to adopt a wait-and-see approach until clearer price direction emerges.

Investors should also note the company’s inclusion in thematic lists and its Mojo Grade downgrade from Hold to Sell, reflecting a comprehensive reassessment by MarketsMOJO analysts. The downgrade underscores the importance of integrating technical analysis with fundamental insights to guide investment decisions.

Conclusion: Balanced View Calls for Caution

In summary, Bharti Hexacom Ltd presents a compelling fundamental story with strong profitability, healthy growth trends, and solid operational metrics. However, the recent shift in technical indicators to a mildly bearish stance has led to a downgrade in the investment rating from Hold to Sell. The company’s valuation remains elevated, though relatively attractive on a growth-adjusted basis.

Investors should weigh the robust financial performance against the technical caution signals and recent price volatility. Those with a long-term horizon may find value in the company’s growth prospects, while short-term traders might prefer to heed the technical warnings and monitor for a clearer trend reversal before committing fresh capital.

Bharti Hexacom’s majority promoter ownership and consistent quarterly results provide a foundation of stability, but the current market environment demands vigilance and selective positioning.

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