BHARTIARTL A 26% Growth Quarter Reported Itself as a 55% Profit Collapse

The Same Mechanism, a Third Direction

Three quarters on this site, three different directions for the same distortion. Two quarters ago, Bharti's headline growth understated the real number because the year-ago base carried an exceptional credit. Last quarter, the mechanism flipped: a charge in the base made headline growth look bigger than the real, like-for-like number. This quarter runs a third way, and it's the most dramatic yet: the year-ago quarter (Dec-24) carried a one-time Rs7,545.6 crore exceptional gain - the non-cash fair-value remeasurement from Indus Towers becoming a consolidated subsidiary in November 2024, covered in detail here at the time. This quarter has no equivalent windfall - just a small Rs256.8 crore exceptional charge from a New Labour Codes compliance provision (see Beyond the Usual). The gap between those two bases is large enough to turn a genuinely strong quarter into a headline that reads like a collapse.

Net income attributable to owners fell 55.1% YoY, from Rs14,781.2 crore to Rs6,630.5 crore - the number most coverage will quote, and the number that most misleads. On the company's own like-for-like basis (net income before exceptional items, using the deck's re-instated Dec-24 comparative - the same caution flagged in every prior post about this line), growth was a genuinely strong 26.0%, from Rs5,493.7 crore to Rs6,920.0 crore (see Key Financial Metrics for the caveat on that comparative figure). EBITDA^» grew 25.6% to Rs31,485.1 crore, with margin hitting a fresh site-high of 58.3% - beating Sep-25's 58.1% high for the second straight quarter. Revenue grew 19.6% to Rs53,981.6 crore, still carrying the same Indus-consolidation asterisk flagged in every post since Q3 FY25, though this is now the first quarter where Indus sits in both the current and year-ago base (partially in Dec-24, fully in Dec-25) rather than being absent from one side entirely.

The quarter also opened under new leadership for the first time: Gopal Vittal, who steered Airtel as MD & CEO for 13 years, moved up to Executive Vice Chairman effective January 1, 2026, with Shashwat Sharma - previously COO and CEO-designate since the succession plan disclosed in the Q2 FY25 post - now MD & CEO of Airtel India. This call, held February 6, 2026, was the first under that structure: Sharma led the India business update, group CFO Soumen Ray opened with the consolidated numbers, and Vittal fielded most of the Q&A. Three threads flagged over the last two posts stayed silent for a third straight quarter - the Indus Towers stake-increase plan, the Adani Data Networks spectrum deal, and the Bharti Hexacom tower-transfer pause - and a fourth, quieter change showed up in the auditor's own report (see Beyond the Usual).

The Prescription

Bharti should lean into its own arithmetic and stop letting the market's headline-EPS reflex do the talking for it. This is now the third quarter in a row where the single most important number in the release - net income - has been distorted by an exceptional item that has nothing to do with the underlying business, and the company's own investor materials already do the work of showing the clean, before-exceptional number. The problem isn't disclosure; it's emphasis. A results release that led with "EBITDA grew 25.6% to a fresh margin high, net income before exceptional items grew 26%" would leave far less room for a wire headline reading "profit falls 55%" to dominate the narrative for a quarter that was, by the company's own numbers, one of its best operationally. Airtel has the data to correct the record itself; it should use it more assertively in the headline of its own release, not just in a footnote three tables down.

What it should stop doing: treating "Xtelify" as a marketing beat instead of a disclosure commitment. Last quarter, management named the platform and named its partners - Singtel, Globe Telecom, Airtel Africa - giving the market something concrete to underwrite. This quarter, the same business was described only as "two deals, one getting much deeper... final stages with another couple" - a step back in specificity from a company that had just shown it could be more precise. A platform business asking to be valued as a real diversification story needs to keep disclosing at the level of specificity it set for itself, not retreat to vaguer language the moment the novelty of the first announcement wears off.

Key Financial Metrics

Q3 FY26 (quarter ended Dec 31, 2025) vs. Q3 FY25, consolidated, audited

FX rates below are the company's own disclosed RBI reference rates for the quarter: INR 89.03 = USD 1 (average, for income-statement lines) and INR 89.94 = USD 1 (December 31, 2025 close, for balance-sheet and market-cap figures); the year-ago quarter used INR 84.38 (average) and INR 85.47 (close), both per this quarter's own disclosed comparative rates.

Metric	Q3 FY26 (INR)	Q3 FY26 (USD)	Q3 FY25 (INR)	YoY
Revenue	Rs53,981.6 crore	~$6.06B	Rs45,129.3 crore	✅ +19.6% (still carrying the Indus-consolidation asterisk - see above)
EBITDA» (audited results' own "profit before D&A, finance costs, share of JV, exceptional items and tax")	Rs31,485.1 crore	~$3.54B	Rs25,066.3 crore	✅ +25.6%, margin 58.3% - a fresh site-high, beating Sep-25's 58.1%
Operating Income» (EBIT, derived: audited EBITDA minus audited depreciation & amortisation)	Rs18,065.0 crore	~$2.03B	Rs13,362.1 crore	✅ +35.2%, margin 33.5% vs 29.6%
Profit before tax and exceptional items (audited)	Rs12,558.1 crore	~$1.41B	Rs9,346.3 crore	✅ +34.4%
Exceptional items (net)	Rs256.8 crore charge (New Labour Codes provision, see Beyond the Usual)		Rs7,545.6 crore credit (Indus fair-value remeasurement gain)	⚠️ the flip from a large credit to a small charge is the entire distortion this post is about
Profit before tax (audited, statutory)	Rs12,301.3 crore	~$1.38B	Rs16,891.9 crore	⚠️ -27.2% (base-effect only - see above)
Net Income» before exceptional items (owners, company's own comparative basis)	Rs6,920.0 crore	~$777M	Rs5,493.7 crore	✅ +26.0% - the company's own like-for-like comparison, but the Dec-24 base here is the deck's "re-instated" comparative, not the original as-reported figure (same caution flagged in prior posts)
Net Income (total profit for the period, after exceptional items, audited)	Rs8,502.8 crore	~$955M	Rs16,134.6 crore	⚠️ -47.3%
...of which, attributable to Bharti Airtel's own shareholders (audited)	Rs6,630.5 crore	~$745M	Rs14,781.2 crore	⚠️ -55.1% (understates the like-for-like growth - see above)
...of which, attributable to non-controlling interests» (audited)	Rs1,872.3 crore	~$210M	Rs1,353.4 crore	✅ +38.3%
Basic EPS	Rs11.44	~$0.13	Rs25.54	⚠️ -55.2% (same base effect)
Capex (company-reported)	Rs11,786.9 crore	~$1.32B	Rs9,160.8 crore	⚠️ +28.6% - the Dec-24 comparative here is the deck's re-instated figure, not an independently-sourced as-reported one (no investor presentation existed for the original Dec-24 quarter, so no as-reported comparative is available - see that post)
Operating Free Cash Flow» (EBITDA minus capex, company-reported style)	Rs19,356.7 crore	~$2.17B	Rs19,895.9 crore (re-instated)	⚠️ -2.7% on the re-instated comparative
Total Cash (cash and cash equivalents, end of period, audited cash flow statement)	Rs15,639.4 crore	~$1.76B	Rs9,922.4 crore	✅ +57.6%

Note on the audited PBT and net-income rows: this quarter's exceptional item is a genuine, if small, charge - the first exceptional item of any kind in three quarters, breaking the "zero exceptional items" streak that ran through Jun-25 and Sep-25. The Dec-24 comparative carried a Rs7,545.6 crore exceptional credit - the one-time, non-cash gain from remeasuring Bharti's pre-existing Indus Towers stake to fair value when the company became a consolidated subsidiary, covered at the time. A large credit rolling out of the year-ago base, with no equivalent this year, is the entire mechanism behind this quarter's headline decline - the mirror image of last quarter's charge-in-the-base distortion.

Balance sheet metric	Dec 2025 (INR)	Dec 2025 (USD)	Dec 2024 (INR)	YoY
Total Assets	Rs529,405.6 crore	~$59.86B	Rs500,863.6 crore	✅ +5.7%
Total Liabilities	Rs360,392.5 crore	~$40.98B	Rs349,431.3 crore	✅ +3.1%
Equity attributable to owners of the parent	Rs124,794.9 crore	~$14.17B	Rs103,507.5 crore	✅ +20.6% YoY, and up from Sep-25's Rs117,796.0 crore QoQ
Book value per share (company-disclosed, adjusts for partly-paid shares)	Rs215.16	~$2.44	n/a	✅ up from Sep-25's Rs203.10
Net Debt (company-reported, incl. leases)	Rs182,620.6 crore	~$20.71B	see note	✅ down QoQ from Sep-25's Rs194,713.1 crore - real, non-recast figures both times
Net Debt excluding lease obligations	Rs112,491.2 crore	~$12.75B	see note	✅ down QoQ from Sep-25's Rs126,651.3 crore, an 11.2% quarter-on-quarter deleveraging
Net Debt/EBITDA (annualized, company-reported)	1.47x		n/a - see note	✅ improved sharply from Sep-25's 1.63x
Interest Coverage Ratio (company-reported)	6.98x		6.67x (re-instated)	✅ improved from Sep-25's 6.69x

Total Assets and Total Liabilities YoY come directly from this quarter's audited segment note, which discloses a genuine Dec-24 comparative - a real, usable YoY, same as last quarter. Net Debt's YoY row stays "see note" for the same reason flagged in the last three posts: the deck's own Dec-24 comparative predates full comparability treatment for the Indus consolidation and is a re-instated, not originally-reported, figure. The reliable comparison is QoQ, and it's a real one: net debt including leases fell 6.2% and net debt excluding leases fell 11.2% quarter-on-quarter, a genuine deleveraging move that management didn't attribute to any single cause on the call beyond "disciplined capital allocation" - notably, it happened before the cash from the rights-issue final call (see Beyond the Usual) actually arrives, since that payment period only opens March 2, 2026.

Key Operational Metrics

An investor presentation and earnings call transcript were available for this quarter; no separate press release was sourced.

Metric	Dec-25	Dec-24	YoY
Total customer base (consolidated)	~645,307,000	~576,975,000	✅ +11.8%
India customer base	~465,918,000	~413,869,000	✅ +12.6%
Africa customer base	~179,389,000	~163,106,000	✅ +10.0%
Mobile Services India ARPU»	Rs259	Rs245	⚠️ +5.7% - a real deceleration from Sep-25's +9.9%, flagged explicitly on the call (see Management's Key Message)
Postpaid base (Mobile Services India)	~28,143,000	~25,258,000	✅ +11.4%
5G customer base (India, per management commentary)	~181,000,000	not disclosed this quarter	✅ +8.4% QoQ vs Sep-25's ~167,000,000; no clean YoY comparative for a second straight quarter
Homes Services net additions (quarter)	~1,159,000	~674,000	✅ another record pace, ahead of Sep-25's 951,000
Homes Services customer base	~13,086,000	~9,226,000	✅ +41.8% YoY, crossed 13 million
Digital TV net additions (quarter)	~73,000 gained	~29,000 gained	⚠️ looks like a reversal from Sep-25's ~340,000 lost, but this metric now includes IPTV subscribers for the first time - see Beyond the Usual before reading this as a DTH turnaround
Airtel Payments Bank monthly transacting users	~108,000,000	not directly comparable	✅ up from Sep-25's ~104,800,000

Management's own framing this quarter added a specific new data point to the usual ARPU story: on the call, an analyst noted wireless revenue growth had fallen below 10% for the first time in five or six years, and Gopal Vittal didn't dispute it - confirming "an overall sort of softening in market growth on wireless" running at roughly 6% industry-wide, with the same drivers as ever ("feature phone to smartphones, prepaid to postpaid, data penetration, international roaming") but no fresh mention of a tariff increase ask, beyond a vague reference to "more creative avenues."

Segment Comparison

Bharti Airtel still reports seven consolidated segments, with Mobile Services South Asia disposed since June 2024. This is the fifth consecutive quarter with a genuine, audited Passive Infrastructure Services (Indus Towers) consolidation, and the first quarter where Indus sits in both the current and year-ago segment base - though only partially in Dec-24 (Indus became a subsidiary November 19, 2024, so the year-ago quarter carries about six weeks of it), so the YoY comparison below is closer to comparable than Sep-25's outright n/a but still not clean.

Segment	Revenue (Q3 FY26)	Revenue (Q3 FY25)	YoY	Segment Result (Q3 FY26)	Margin (Q3 FY26)	Margin (Q3 FY25)
Mobile Services India	Rs28,651.6 crore	Rs26,268.7 crore	✅ +9.1%	Rs9,090.8 crore	✅ 31.7%	28.5%
Mobile Services Africa	Rs15,010.0 crore	Rs10,703.2 crore	✅ +40.2%	Rs5,069.5 crore	✅ 33.8%	29.7%
Airtel Business	Rs5,353.1 crore	Rs5,646.0 crore	⚠️ -5.2%	Rs1,579.0 crore	✅ 29.5%	24.5%
Passive Infrastructure Services (Indus Towers)	Rs8,180.0 crore	Rs3,529.0 crore	⚠️ +131.8% (not comparable - only ~6 weeks of Indus in the Dec-24 base)	Rs2,804.7 crore	⚠️ 34.3% (vs 78.9% Dec-24 - a partial-quarter recognition quirk, not a real margin comparison)	78.9%
Homes Services	Rs2,000.8 crore	Rs1,509.2 crore	✅ +32.6%	Rs308.7 crore	⚠️ 15.4%	21.8%
Digital TV Services	Rs755.2 crore	Rs760.7 crore	⚠️ -0.7%	Rs(63.7) crore	⚠️ -8.4%	4.1%
Others	Rs93.7 crore	Rs87.3 crore	✅ +7.3%	Rs106.0 crore
Total segment revenue	Rs60,044.4 crore	Rs48,504.1 crore	✅ +23.8%	Rs17,839.9 crore

("Segment Result" is profit before finance costs, charity/donation, exceptional items and tax - an EBIT-level margin - per the audited segment note, consistent with prior posts.)

Mobile Services India's margin expansion continued, up another 3.2 percentage points YoY to 31.7%, a new high across every quarter covered here, extending the reversal tracked since Dec-24 even as revenue growth itself decelerated to 9.1% - the segment is now generating more margin from a slower-growing base, exactly the premiumization story management describes. Africa's margin also expanded, to 33.8% from 29.7%, on continued strong constant-currency growth (Africa customer ARPU in USD terms grew 11.8% YoY) and a currency tailwind, as flagged as a possibility last quarter now playing out in earnest - management noted on the call that reported growth is now running ahead of constant-currency growth for the first time in several quarters, since the Naira has stabilized and even hardened slightly. Airtel Business revenue fell again, down 5.2% on the same deliberate commodity exit flagged in each of the last three posts, but margin rose to 29.5% from 24.5%, confirming again that the exited low-margin business barely mattered to profit. Homes Services margin fell further still, to 15.4% from 21.8%, extending the multi-quarter compression flagged in every post on this thread even as net-adds hit yet another record - the segment posted a negative Operating Free Cash Flow this quarter (capex of Rs1,605.5 crore against EBITDA of Rs1,003.1 crore), the clearest sign yet that fiber/FWA capex is running well ahead of what the business is converting into segment profit. Digital TV's segment result stayed meaningfully negative (-8.4% margin), roughly in line with Sep-25's -8.0% rather than worsening further, though the operational net-adds figure now includes IPTV subscribers (see Beyond the Usual), so the segment's underlying DTH trajectory is harder to read cleanly than the revenue/margin numbers above, which are unaffected by that reporting change.

Homes and Mobile India: the same tension, now with a negative cash-flow number attached

Every post on this thread since Jun-25 has flagged Homes Services chasing record net-adds while its margin compresses. This quarter adds a sharper data point: Homes capex (Rs1,605.5 crore) now exceeds Homes EBITDA (Rs1,003.1 crore), meaning the segment is cash-consumptive on an EBITDA-minus-capex basis even as its revenue and customer base both grow at the fastest pace on this site. That's not unusual for a business mid land-grab - management explicitly frames broadband as a "100 million connected homes" medium-term opportunity worth funding aggressively - but it is the first quarter the arithmetic has crossed into outright negative territory rather than just compressing, and worth watching whether it's a one-quarter step-up in fiber/FWA rollout or a new steady state.

Beyond the Usual

The going-concern emphasis on Indus's largest customer disappeared from the auditor's own opinion

Every prior audited quarter covered on this site has carried an "Emphasis of Matter" paragraph in the independent auditor's report, drawing attention to material uncertainty about the ability of one of Indus Towers' largest customers to continue as a going concern. This quarter's auditor's report - both the consolidated and standalone versions - contains no such paragraph; the opinion moves directly from "Basis for Opinion" to "Responsibilities of Management" with nothing in between. The underlying disclosure hasn't vanished - the company's own Note 3 to the financial results still describes the same customer situation, now noting the customer "has reported... that it is confident of generating sufficient cash flow from operations to meet its obligations payable over the next 12 months" based on recent AGR developments, and states the Group "will continue to monitor" it. But the auditor choosing not to elevate that disclosure to an Emphasis of Matter this quarter - after doing so in every prior quarter covered here, including as recently as last quarter - is itself a judgment call worth naming: either the auditor now assesses the risk as no longer requiring that level of prominence, or the customer's own more confident going-concern language changed the calculus. Either way, a reader relying on the auditor's report alone would no longer see this flagged at all.

Three threads from prior quarters stayed silent for a third straight time

The Indus Towers stake-increase plan (51% toward 56%, disclosed only in a Q&A answer last quarter) wasn't mentioned anywhere this quarter - not in the results, the presentation, or the call, including when an analyst asked Vittal directly about further portfolio moves after Indus and Airtel Africa, and he called further specifics "premature." The Bharti Hexacom tower-transfer pause and the Adani Data Networks 26 GHz spectrum deal, both silent for two straight quarters already, stayed silent for a third. Three separate threads, all now sitting in extended silence with no way for a reader to distinguish "quietly progressing" from "quietly shelved," is a pattern that's only getting harder to dismiss as coincidence the longer it continues.

Xtelify's disclosure got vaguer, not more specific, in its second quarter

Last quarter, Xtelify launched with named partners - Singtel, Globe Telecom, Airtel Africa - and specific claims (up to 40% cloud-spend optimization, 70+ active conversations). This quarter, asked directly about it, Vittal described "two deals, one of which is now getting much deeper... in the final stages with another couple" - no names, no updated conversation count, and a clarification that the domestic India Cloud business and the telco-facing Xtelify platform business are in fact two separate things that had been discussed together. The retreat from named specificity in only the platform's second quarter of public existence is worth watching: a diversification story asking to be taken seriously needs to keep disclosing at the bar it set for itself, not regress toward vaguer language once the initial announcement has landed.

The rights-issue final call, approved by the Board on December 18, 2025, requires holders of 392,287,662 outstanding partly-paid equity shares to pay Rs401.25 per share (including a Rs397.50 premium) between March 2 and March 16, 2026 - a maximum cash inflow of roughly Rs15,740.5 crore that hadn't yet been received as of this quarter's balance sheet date. On the call, Vittal explained the call itself wasn't a discretionary capital-allocation decision - the three-year foreclosure window on the original 2021 rights issue had simply expired, leaving no option but to call it - and that the proceeds "will clearly be done to ensure long-term value creation." Worth tracking in the next post: this cash hasn't arrived yet, so the QoQ deleveraging already visible this quarter happened before this inflow, not because of it.

The exceptional charge this quarter came from an unusually specific source: a Rs256.8 crore increase to the Group's provision for gratuity and compensated absences, triggered when India's four consolidated "New Labour Codes" (on Wages, Social Security, Industrial Relations, and Occupational Safety) became effective November 21, 2025. It's the first exceptional item on this site driven by a change in labour law rather than a currency, tax, or M&A-related event - a reminder that exceptional items aren't always the flattering-vs-unflattering story they usually are here; sometimes they're just a company following its own accounting policy for a one-off, non-recurring regulatory cost.

Google's newly announced Visakhapatnam data-center partnership with Airtel - first flagged as unsized last quarter - now has a number attached, though it's Google's number, not Bharti's: Google disclosed an investment of "approximately $15 billion USD for 5 years" toward AI infrastructure in India, of which the Visakhapatnam hub built with Airtel and AdaniConnex as ecosystem partners is one piece. Airtel's own capex commitment to its share of this remains unsized on the call, as it was last quarter - worth distinguishing in future coverage between Google's headline number and whatever Bharti itself ultimately spends.

Airtel Business signed a multi-year contract to build and operate the Indian Railways Security Operations Centre (IRSOC) - a named, concrete B2B win covering cybersecurity for 13,000 daily trains, 20 million riders, and 1.5 billion tons of freight - a useful data point against the Prescription's call for Xtelify to disclose with the same concreteness. Separately, Airtel Africa announced a partnership with SpaceX to launch Starlink Direct-to-Cell satellite connectivity across its 14 African markets on December 16, 2025 - Africa Airtel becomes the first mobile operator on the continent with this specific SpaceX arrangement, extending the satellite-connectivity thread first noted in the 2025-06 post about the group's broader SpaceX collaboration.

Management Under a New CEO: The Same Tariff Question, a Different Answer

The call's structure itself was the first signal of change: Shashwat Sharma, not Gopal Vittal, delivered the India business update this quarter - the first earnings call following the leadership transition disclosed back in the Q2 FY25 post, effective January 1, 2026. Vittal, now Executive Vice Chairman, still fielded most of the Q&A, but the shift in who owns the opening narrative is itself worth noting heading into future quarters.

On capital allocation, the dividend question returned after skipping entirely last quarter - HSBC's Piyush Choudhary asked directly whether the rights-issue proceeds and improving free cash flow could support a special dividend or a step-up. Vittal's answer stuck to the same script used across every prior quarter on this site: "a progressive dividend policy... you will continue to see that play out," explicitly decoupling the rights-issue cash from any dividend decision. More revealing was a separate exchange with Emkay Global's Pranav Kshatriya, who pointed out that at roughly 1x net debt/EBITDA (down from the 2-3x Vittal himself called an "optimal capital structure"), Bharti is sitting on Rs1.5-2 lakh crore of unused balance-sheet capacity. Vittal's answer named three uses - core business investment, Data Center buildout (with an explicit ambition to reach 25% market share within three to four years), and opportunistic industry consolidation "at the right value" - without committing to returning any of that capacity to shareholders, and directly declined to commit to bringing leverage back up to 2x: "we are not at that point at this stage."

On the ARPU deceleration flagged in Key Operational Metrics above, management's answer was notably less confident than in prior quarters: Vittal acknowledged the softening directly rather than reframing it, and when pressed on differentiated 5G pricing, Shashwat Sharma said the company needs "a lot more" work on "pricing repair and architecture" - a more candid admission of a stalled lever than the usual "premiumization continues" framing.

The Stock Rose 12.1% This Quarter, and 104.0% Over Two Years

Bharti Airtel's shares closed at Rs2,106 on the BSE on December 31, 2025, per the company's own disclosed closing price - up 12.1% from the Rs1,878 close on September 30, 2025 covered in the last post, reversing that quarter's decline. Zooming out, the stock is up roughly 104.0% over the two years to December 31, 2025 (from Rs1,032.20 on December 29, 2023, independently sourced), essentially back in line with Jun-25's roughly 128.6% two-year gain after Sep-25's dip. The company has not split its stock since 2009, so no split adjustment is needed for either price. This quarter, the stock rose while the headline profit number fell 55% - the inverse of last quarter's pattern, and as good a reminder as any of the recurring point on this site: the market moves on what it understands about the underlying business, not on whichever number a wire headline happens to quote.

Target Valuation Range

Enterprise value Rs1,449,700 crore, implying a perpetual FCF growth rate of roughly 6.1% - up from ~5.5% last quarter, a partial reversal of that quarter's cooling. Headline multiples all look more expensive this quarter, but that's mostly a mechanical illusion from the exceptional-items base effect - the reverse DCF, unaffected by that distortion, shows only a modest uptick in the market's implied growth expectations, not a genuine re-rating into overvalued territory.

Market cap → enterprise value	Q2 FY26	Q3 FY26
Market capitalization	Rs1,126,200 crore	Rs1,267,100 crore (~$140.9 billion)
Book value/share	Rs203.10	Rs215.16
Enterprise value	Rs1,320,900 crore	Rs1,449,700 crore (~$161.2 billion)

Peer-multiple sanity check	Q2 FY26	Q3 FY26
Trailing P/E	27.77x	39.65x (company-reported; up sharply, but almost entirely a mechanical base effect - trailing EPS now has this quarter's exceptional-charge-depressed net income in the window instead of the exceptional-credit-inflated Dec-24 quarter it replaced)
P/B	9.10x	9.66x (company-reported, Market Price/Book Value; up modestly, tracking the share-price gain more than offsetting the higher book value per share)
EV/EBITDA	11.04x	11.64x (company-reported; a real but modest increase, since neither EBITDA nor enterprise value is distorted by the exceptional-item base effect the way trailing EPS is)

Reverse DCF: Solving for the perpetual free-cash-flow growth rate implied by enterprise value, using the trailing four quarters' company-reported Operating Free Cash Flow (Mar-25 through Dec-25: Rs13,003.5 crore + Rs19,859.8 crore + Rs18,556.7 crore + Rs19,356.7 crore = Rs70,776.7 crore - all four are genuine as-reported figures this time, none re-instated, since the recast adjustment only applies to Dec-24 and earlier) and a WACC of approximately 11.3% (updating the methodology used in prior posts: an ~11.9% cost of equity off a ~7.1% risk-free rate, 0.8 beta, and 6% India market risk premium, blended against an estimated post-tax cost of debt of roughly 7.2%, weighted at the ~87.4%/12.6% equity/net-debt split implied by this quarter's enterprise value - a higher equity weighting than last quarter's 85.3%/14.7% split, since both market cap rose and net debt fell), the market's Rs1,449,700 crore enterprise value implies a perpetual FCF growth rate of roughly 6.1% - up from Sep-25's implied 5.5%, a partial reversal of that quarter's cooling. Trailing free cash flow actually fell slightly (from Rs71,315.9 crore to Rs70,776.7 crore, about -0.8%) while enterprise value rose roughly 9.8% (from Rs1,320,900 crore) - the market paid more this quarter for slightly less trailing cash flow, the cleanest sign that this uptick reflects genuine optimism about the business (likely tied to the EBITDA-margin high and the deleveraging) rather than simply following a stronger cash-flow print.

The honest read this quarter: a ~6.1% perpetual growth assumption remains a modest one for a business growing EBITDA at over 25% and holding leverage near a multi-year low, so nothing here says the stock is expensive in absolute terms. But the direction is worth tracking against the pattern across this site's last several posts: the market's implied growth expectation has now moved in three different directions across three straight quarters (down, then down again, then up), suggesting investors are still working out how much of Bharti's recent operating momentum to trust as durable rather than pricing in a settled view.

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