BHARTIARTL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.9
| Stock Code | BHARTIARTL | Market Cap | 11,72,441 Cr. | Current Price | 1,949 ₹ | High / Low | 2,175 ₹ |
| Stock P/E | 48.4 | Book Value | 244 ₹ | Dividend Yield | 0.82 % | ROCE | 8.18 % |
| ROE | 11.4 % | Face Value | 5.00 ₹ | DMA 50 | 2,040 ₹ | DMA 200 | 1,944 ₹ |
| Chg in FII Hold | 1.33 % | Chg in DII Hold | 0.14 % | PAT Qtr | 4,545 Cr. | PAT Prev Qtr | 3,764 Cr. |
| RSI | 27.2 | MACD | -33.7 | Volume | 31,07,628 | Avg Vol 1Wk | 79,27,181 |
| Low price | 1,560 ₹ | High price | 2,175 ₹ | PEG Ratio | 0.45 | Debt to equity | 1.16 |
| 52w Index | 63.3 % | Qtr Profit Var | 80.5 % | EPS | 47.1 ₹ | Industry PE | 39.9 |
💹 Financials: Bharti Airtel shows moderate efficiency with ROE at 11.4% and ROCE at 8.18%, reflecting limited capital productivity compared to peers. Debt-to-equity at 1.16 indicates high leverage, which adds financial risk. Quarterly PAT rose strongly from 3,764 Cr. to 4,545 Cr., showing an 80.5% growth, highlighting improving profitability. EPS at 47.1 ₹ supports earnings visibility.
📊 Valuation: The stock trades at a P/E of 48.4, above the industry average of 39.9, suggesting premium valuation. The P/B ratio is ~8.0 (1949/244), which is elevated. PEG ratio of 0.45 indicates valuations are attractive relative to growth prospects. Dividend yield at 0.82% is modest, offering limited income return.
🏢 Business Model & Advantage: Bharti Airtel operates in the telecom sector, providing mobile, broadband, and enterprise services. Its competitive advantage lies in scale, strong brand presence, and diversified revenue streams across India and Africa. The company benefits from rising data consumption and digital adoption, supported by 5G rollout.
📈 Overall Health: Financially stable with strong revenue growth and profitability momentum, but high debt levels remain a concern. RSI at 27.2 indicates the stock is oversold, while MACD at -33.7 suggests bearish momentum in the short term. Long-term fundamentals remain intact, supported by telecom sector expansion and digital demand.
🎯 Entry Zone: Attractive entry around 1,850–1,950 ₹ range, near DMA 200 support levels. Current price of 1,949 ₹ is reasonable for long-term investors, though caution is advised due to high leverage and premium valuation.
Positive
- Strong quarterly PAT growth of 80.5% shows earnings momentum.
- PEG ratio of 0.45 indicates attractive valuation relative to growth.
- FII holdings increased by 1.33%, reflecting foreign investor confidence.
- Strong brand presence and diversified revenue streams.
Limitation
- High debt-to-equity ratio (1.16) adds financial risk.
- ROE (11.4%) and ROCE (8.18%) are modest compared to peers.
- Premium valuation with P/E at 48.4 above industry average.
- Dividend yield at 0.82% offers limited income return.
Company Negative News
- High leverage remains a concern for long-term sustainability.
- Short-term technical indicators (RSI oversold, MACD negative) suggest weak momentum.
Company Positive News
- Quarterly PAT rose significantly from 3,764 Cr. to 4,545 Cr.
- FII holdings increased by 1.33%, showing strong foreign investor confidence.
- 5G rollout and rising data consumption support growth prospects.
Industry
- Telecom industry benefits from rising digital adoption and data demand.
- Industry P/E at 39.9 indicates Bharti Airtel trades at a premium valuation.
- Sector supported by government initiatives and infrastructure expansion.
Conclusion
Bharti Airtel remains a fundamentally strong telecom player with robust earnings growth and sectoral tailwinds. However, high debt and premium valuations limit upside potential. Entry around 1,850–1,950 ₹ is advisable for long-term investors, with cautious accumulation recommended given leverage risks and modest return ratios.
I can also prepare a comparative HTML report against Reliance Jio (RIL’s telecom arm) to highlight Bharti Airtel’s relative strengths in profitability and risks from debt.