Mumbai, June 6 -- The downgrade was attributed to a steep 40% valuation premium over Bharti Airtel and an unfavourable risk-reward profile.

The brokerage projects Bharti Hexacom's net debt (excluding leases) will be zero by FY27 and expects dividends to rise from Rs 10 per share in FY25 to Rs 30 in FY27. ARPU (Average Revenue Per User) is estimated to increase from Rs 242 in FY25 to Rs 284 by FY27, driven by a likely tariff hike in December 2025. Post-FY28, ARPU is forecast to grow at a 5.5% CAGR, while revenue and EBITDA growth are expected to moderate to around 7%.

Despite strong execution and premiumisation, the firm flagged concerns over Bharti Hexacom's limited geographic spread, which could cap growth. The government's 15% stake r...