Summary

  • FY26 consolidated revenue was Rs 210,973 crore, up 22.0%, with EBITDA of Rs 121,268 crore at a 57.5% margin, 300 basis points higher year on year.
  • Net debt excluding leases fell 34% to Rs 910,485 million, and reported operating free cash flow reached Rs 604,242 million, described by the company as a lifetime high.
  • India mobile revenue grew about 0.1% quarter on quarter in Q4 FY26 even as ARPU reached Rs 257, which is the central open question for FY27.
  • A recommended Rs 24 final dividend, subject to shareholder approval, and an unresolved retrospective spectrum-charge dispute on appeal are the two conditional items that most shape the cash picture.

Where the cash came from

The free-cash-flow number is an arithmetic identity rather than a one-off gain. Consolidated EBITDAaL of Rs 1,079,460 million minus capital expenditure of Rs 475,218 million leaves Rs 604,242 million (IR pack). The output therefore depends on two inputs: the lease-adjusted operating margin, which management put at 51.2% for the year, and capital expenditure, which rose in absolute terms to Rs 47,522 crore consolidated from Rs 38,912 crore a year earlier, with India capex of Rs 39,654 crore including passive infrastructure against Rs 33,242 crore (highlights, FY25 release).

Scope matters here. Management told the Q4 FY26 earnings call that India capex excluding passive infrastructure was about Rs 31,000 crore, a materially smaller base than the Rs 39,654 crore reported including passive assets (earnings webinar transcript). A sell-side note published after the prior year's results recorded management guidance that FY26 capital expenditure would be lower than FY25; in aggregate, reported capex was higher (JM Financial).

Spectrum: prepayment as an interest-rate decision

The leverage reduction did not begin in FY26; FY26 inherited it. In March 2025, Airtel and Bharti Hexacom prepaid Rs 5,985 crore of deferred spectrum liabilities from the 2024 auctions, taking cumulative prepayments to Rs 66,665 crore and clearing Rs 116,405 crore of scheduled future instalments about seven years ahead of average residual maturity (company release). Residual spectrum liabilities excluding AGR were then about Rs 52,000 crore at an average interest rate of about 7.22%, payable in annual instalments running to FY 2042.

The economic logic is simple to state and hard to reverse. Prepaying a 7.22% obligation is equivalent to earning 7.22% on the cash used, a high hurdle for holding liquidity that earns less. Its cost is optionality: money paid to the Department of Telecommunications cannot be redeployed if an auction, an acquisition or a downturn demands it. The audited cash-flow statement makes the entanglement explicit — payments to the department cover upfront, deferred and prepaid amounts and interest across the 2012, 2015, 2016, 2021, 2022 and 2024 auctions, so spectrum outflow is a multi-vintage claim rather than a single year's charge (audited results).

The conditional items

Two items in the FY26 disclosures are stated as intentions or disputes rather than settled outcomes.

The first is the dividend. The board recommended a final FY26 dividend of Rs 24 per fully paid-up share and Rs 6 per partly paid-up share, against Rs 16 a year earlier, and the recommendation is subject to shareholder approval (press release, audited results).

The second is the retrospective one-time spectrum charge litigation. A Bombay High Court order dated 8 June 2026 quashing the retrospective demands remains in force after the Supreme Court declined to stay it while admitting the Department of Telecommunications' appeal, so the matter is not finally decided (Voice&Data). Reporting on the dispute records the Centre valuing the bank-guarantee element at about Rs 3,300 crore, Airtel estimating its relief from the High Court ruling at about Rs 8,414 crore in a stock-exchange filing, and the FY26 annual report recording accumulated interest of about Rs 12,137 crore on the original demand through March 2026 — three figures measuring different things, none of which should be read as a settled balance-sheet gain.

Management also described a capital-allocation hierarchy: core business first, then deleveraging, then adjacencies in data centres, financial services and cloud. It said the board approved a share swap to acquire an additional 16.3% of Airtel Africa, a step the disclosed material does not show as completed (earnings webinar transcript). Separately, an Airtel Africa buy-back of up to US$100 million raised the group's effective stake from 66.60% to 66.62% (audited results).

Reported figures versus spoken ones

One caution runs through the year's disclosures. On the earnings call, management said operating free cash flow was "a solid Rs 41,500 crore plus" and that net debt to EBITDAaL "now stands at 1.1" — figures whose scope the company did not define and which are not directly comparable with the Rs 604,242 million and 0.79x reported in the investor materials (earnings webinar transcript, IR pack). The press release separately reports net debt to EBITDA including leases of 1.29x against 1.86x, while the annual report summary carries both a 1.3x and a 0.6x reference to net debt to EBITDAaL in different places. The direction is consistent; the levels are not interchangeable.

Also effective during the year: scale. Q4 FY26 India smartphone data customers were 296.8 million, up 20.0 million year on year, and mobile data traffic was 26,688 petabytes, up 32.8% — the volume side of the business that pricing has to convert into revenue (highlights).

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