BHARTIARTL - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.8
| Stock Code | BHARTIARTL | Market Cap | 12,18,170 Cr. | Current Price | 2,025 ₹ | High / Low | 2,175 ₹ |
| Stock P/E | 50.3 | Book Value | 244 ₹ | Dividend Yield | 0.79 % | ROCE | 8.18 % |
| ROE | 11.4 % | Face Value | 5.00 ₹ | DMA 50 | 2,035 ₹ | DMA 200 | 1,946 ₹ |
| Chg in FII Hold | 1.33 % | Chg in DII Hold | 0.14 % | PAT Qtr | 4,545 Cr. | PAT Prev Qtr | 3,764 Cr. |
| RSI | 51.9 | MACD | -24.2 | Volume | 76,50,355 | Avg Vol 1Wk | 62,47,281 |
| Low price | 1,560 ₹ | High price | 2,175 ₹ | PEG Ratio | 0.46 | Debt to equity | 1.16 |
| 52w Index | 75.7 % | Qtr Profit Var | 80.5 % | EPS | 47.1 ₹ | Industry PE | 39.0 |
🔍 Analysis: Bharti Airtel shows strong earnings momentum with quarterly PAT growth of 80.5% and EPS at 47.1 ₹. FII holdings increased (+1.33%), reflecting foreign investor confidence. However, the stock trades at a high P/E of 50.3 compared to the industry average of 39, suggesting stretched valuations. ROE (11.4%) and ROCE (8.18%) are moderate, while dividend yield (0.79%) is low. Debt-to-equity at 1.16 indicates leverage risk. PEG ratio of 0.46 highlights undervaluation relative to growth, but price is near resistance (2,175 ₹), limiting immediate upside.
💡 Entry Zone: Ideal entry would be in the 1,850–1,950 ₹ range, aligning with 200 DMA support (1,946 ₹) and providing margin of safety.
📈 Exit / Holding Strategy: If already holding, maintain position for 2–4 years given growth potential and PEG comfort. Consider partial exit near 2,150–2,200 ₹ resistance if valuations stretch further without earnings support. Long-term investors should monitor debt levels and efficiency metrics (ROE/ROCE) for sustained compounding.
🌟 Positive
- Quarterly PAT growth of 80.5% (4,545 Cr vs 3,764 Cr)
- EPS at 47.1 ₹ supports earnings strength
- PEG ratio (0.46) indicates undervaluation relative to growth
- FII holdings increased (+1.33%)
- Strong volume above weekly average
⚠️ Limitation
- High P/E (50.3 vs industry 39)
- Moderate ROE (11.4%) and ROCE (8.18%)
- Low dividend yield (0.79%)
- Debt-to-equity at 1.16, relatively high leverage
📉 Company Negative News
- Valuations stretched compared to industry peers
- Leverage risk due to debt-to-equity above 1
📈 Company Positive News
- Strong quarterly profit growth and EPS performance
- Foreign investor confidence with FII stake increase
- Stock trading above DMA supports, showing trend strength
🏭 Industry
- Industry PE at 39, lower than Bharti Airtel’s valuation
- Telecom sector benefits from rising data demand and digital adoption
✅ Conclusion
Bharti Airtel is a moderate candidate for long-term investment. Strong earnings growth and PEG ratio support accumulation, but high P/E and leverage limit rating. Ideal entry is near 1,850–1,950 ₹ for margin of safety. Existing holders should maintain for 2–4 years, with partial exit near resistance levels if valuations outpace earnings growth.