BHARTIHEXA - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | BHARTIHEXA | Market Cap | 79,908 Cr. | Current Price | 1,598 ₹ | High / Low | 2,053 ₹ |
| Stock P/E | 49.8 | Book Value | 125 ₹ | Dividend Yield | 0.63 % | ROCE | 17.4 % |
| ROE | 25.2 % | Face Value | 5.00 ₹ | DMA 50 | 1,702 ₹ | DMA 200 | 1,687 ₹ |
| Chg in FII Hold | 0.04 % | Chg in DII Hold | 0.04 % | PAT Qtr | 421 Cr. | PAT Prev Qtr | 392 Cr. |
| RSI | 40.4 | MACD | -53.0 | Volume | 1,25,931 | Avg Vol 1Wk | 2,85,541 |
| Low price | 1,225 ₹ | High price | 2,053 ₹ | PEG Ratio | 0.35 | Debt to equity | 1.06 |
| 52w Index | 45.0 % | Qtr Profit Var | 66.4 % | EPS | 30.8 ₹ | Industry PE | 39.9 |
💹 Financials: Bharti Hexacom shows strong profitability with ROE at 25.2% and ROCE at 17.4%, reflecting efficient capital usage. Debt-to-equity at 1.06 indicates high leverage, which adds financial risk. Quarterly PAT improved from 392 Cr. to 421 Cr., showing a 66.4% growth, highlighting solid earnings momentum. EPS at 30.8 ₹ supports earnings visibility.
📊 Valuation: The stock trades at a P/E of 49.8, above the industry average of 39.9, suggesting premium valuation. The P/B ratio is ~12.8 (1598/125), which is steep. PEG ratio of 0.35 indicates attractive valuation relative to growth prospects. Dividend yield at 0.63% is modest, offering limited income return.
🏢 Business Model & Advantage: Bharti Hexacom operates in the telecom sector, providing mobile and broadband services, primarily in North-East India and Rajasthan. Its competitive advantage lies in strong brand association with Bharti Airtel, regional dominance, and rising data consumption. The company benefits from increasing digital adoption and 5G expansion.
📈 Overall Health: Financially stable with strong profitability and growth momentum, though high debt remains a concern. RSI at 40.4 suggests the stock is approaching oversold territory, while MACD at -53.0 indicates bearish momentum in the short term. Long-term fundamentals remain intact, supported by telecom sector expansion and rising demand for data services.
🎯 Entry Zone: Attractive entry around 1,500–1,550 ₹ range, near DMA 200 support levels. Current price of 1,598 ₹ is reasonable for long-term investors, though caution is advised due to high leverage and premium valuation.
Positive
- Strong ROE (25.2%) and ROCE (17.4%) indicate efficient capital use.
- Quarterly PAT growth of 66.4% shows robust earnings momentum.
- PEG ratio of 0.35 suggests attractive valuation relative to growth.
- FII and DII holdings both increased slightly, reflecting investor confidence.
Limitation
- High debt-to-equity ratio (1.06) adds financial risk.
- Premium valuation with P/E at 49.8 above industry average.
- High P/B ratio (~12.8) suggests stretched valuation.
- Dividend yield at 0.63% offers limited income return.
Company Negative News
- High leverage remains a concern for long-term sustainability.
- Short-term technical indicators (MACD negative) suggest weak momentum.
Company Positive News
- Quarterly PAT rose from 392 Cr. to 421 Cr., showing strong earnings growth.
- FII and DII holdings both increased by 0.04%, reflecting investor confidence.
- Strong association with Bharti Airtel enhances brand and market positioning.
Industry
- Telecom industry benefits from rising data demand and digital adoption.
- Industry P/E at 39.9 indicates Bharti Hexacom trades at a premium valuation.
- Sector supported by 5G rollout and government initiatives.
Conclusion
Bharti Hexacom remains a fundamentally strong telecom player with robust earnings growth and sectoral tailwinds. However, high debt and premium valuations limit upside potential. Entry around 1,500–1,550 ₹ is advisable for long-term investors, with cautious accumulation recommended given leverage risks and stretched valuation multiples.
I can also prepare a comparative HTML report against Bharti Airtel to highlight how Hexacom’s regional focus and leverage profile differ from its parent company.