BHARTIHEXA - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.7
| Stock Code | BHARTIHEXA | Market Cap | 80,604 Cr. | Current Price | 1,611 ₹ | High / Low | 2,053 ₹ |
| Stock P/E | 50.2 | Book Value | 125 ₹ | Dividend Yield | 0.62 % | ROCE | 17.4 % |
| ROE | 25.2 % | Face Value | 5.00 ₹ | DMA 50 | 1,692 ₹ | DMA 200 | 1,684 ₹ |
| Chg in FII Hold | 0.04 % | Chg in DII Hold | 0.04 % | PAT Qtr | 421 Cr. | PAT Prev Qtr | 392 Cr. |
| RSI | 44.1 | MACD | -41.0 | Volume | 2,81,309 | Avg Vol 1Wk | 2,47,409 |
| Low price | 1,225 ₹ | High price | 2,053 ₹ | PEG Ratio | 0.35 | Debt to equity | 1.06 |
| 52w Index | 46.7 % | Qtr Profit Var | 66.4 % | EPS | 30.8 ₹ | Industry PE | 39.0 |
🔍 Analysis: Bharti Hexacom shows strong profitability with ROE at 25.2% and ROCE at 17.4%, supported by EPS of 30.8 ₹ and quarterly PAT growth of 66.4%. The PEG ratio of 0.35 suggests undervaluation relative to growth. However, the stock trades at a high P/E of 50.2 compared to the industry average of 39, indicating stretched valuations. Dividend yield is modest at 0.62%. Debt-to-equity at 1.06 signals leverage risk. Current price (1,611 ₹) is below DMA supports (50 DMA at 1,692 ₹, 200 DMA at 1,684 ₹), showing short-term weakness but offering accumulation potential.
💡 Entry Zone: Ideal entry would be in the 1,450–1,550 ₹ range, closer to valuation comfort and technical support, with long-term accumulation possible near 1,225 ₹ (52-week low).
📈 Exit / Holding Strategy: If already holding, maintain position for 2–4 years given strong ROE, ROCE, and PEG ratio. Consider partial exit near 1,950–2,050 ₹ resistance if valuations stretch further without earnings support. Long-term investors should monitor debt levels and efficiency metrics for sustained compounding.
🌟 Positive
- Strong ROE (25.2%) and ROCE (17.4%)
- EPS at 30.8 ₹ supports earnings strength
- PEG ratio (0.35) indicates undervaluation relative to growth
- Quarterly PAT growth of 66.4% (421 Cr vs 392 Cr)
- Stable institutional interest (FII +0.04%, DII +0.04%)
⚠️ Limitation
- High P/E (50.2 vs industry 39)
- Dividend yield modest (0.62%)
- Debt-to-equity at 1.06, relatively high leverage
- Current price below DMA supports, showing short-term weakness
📉 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
- Institutional holdings stable with marginal increases
- PEG ratio highlights undervaluation relative to growth
🏭 Industry
- Industry PE at 39, lower than Bharti Hexacom’s valuation
- Telecom sector benefits from rising data demand and digital adoption
✅ Conclusion
Bharti Hexacom is a moderate candidate for long-term investment. Strong ROE, ROCE, and PEG ratio support accumulation, but high P/E and leverage limit rating. Ideal entry is near 1,450–1,550 ₹ for margin of safety. Existing holders should maintain for 2–4 years, with partial exit near resistance levels if valuations outpace earnings growth.