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X

Bharti Airtel Ltd.

Large Cap

Evaluated by 5900 users |

BSE

: 532454 |

NSE

: BHARTIARTL |

Telecommunication - Service Provider

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Consolidated basis
The valuation guidance of this company is based on Consolidated basis.
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Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
10 Year X-Ray
MoneyWorks4me Colour Coding
Value Creation To be investment worthy, a company has to create a shareholder value in excess of its cost of capital employed. VCI (Value Creation Index) shows how efficient has the company been in doing this.
Value Creation Index: Colour Rating Guide
  • >0.25 : Very Good
  • 0 to 0.25 : Somewhat Good
  • <0: Not Good
 Mar'04Mar'05Mar'06Mar'07Mar'08Mar'09Mar'10Mar'11Mar'12Mar'13
Return on Capital Employed
The return on capital employed gives a sense of how well a company is using its money to generate returns.
9.57%14.97%20.09%29.13%27.52%24.39%18.49%8.85%5.84%4.42%
Value Creation Index
The difference between ROCE and WACC as a Proportion of WACC reveals the extent of value created by a company.
Ie. (ROCE-WACC)/WACC
ROCE is Return on Capital Employed
WACC is Weighted Average Cost of Capital
0.150.230.480.841.201.531.00-0.08-0.40NA
Growth Parameters Growth Parameters help gauge a company's growth in the past 10 years. A value creating company needs to grow at a sustainable pace to continue creating value.
For Net Sales and EPS Growth Rate
  • >12% : Very Good
  • 8% to 12% : Somewhat Good
  • <8% : Not Good
For Debt To CFO
  • 0 to <1.5 : Very Good
  • 1.5 to <3 : Somewhat Good
  • >3 or <0: Not Good
Net Sales (Rs. Cr.)
Net Sales is calculated by deducting excise duty, sales tax and other such deductible indirect taxes from the gross sales of a company.
5,0028,11211,66418,42027,01237,35241,82959,60271,50680,359
Y-o-Y Gr. Rt.-62.2%43.8%57.9%46.6%38.3%12%42.5%20%12.4%
Adjusted EPS (Rs.)
Adjusted Earning per Share is the company’s net profit per share after adjusting for extra-ordinary/exceptional items
1.533.155.3610.6516.7520.2323.8715.1811.255.99
Y-o-Y Gr. Rt.-105.9%70.2%98.7%57.3%20.8%18%-36.4%-25.9%-46.8%
Book Value per Share (Rs.)
The total value that a company will fetch upon liquidation (if it is closed down), after settling all obligations is called its Book Value. Book value of a company includes only tangible assets. Book value allocated to each outstanding share is called Book Value per share
11.4112.0619.3830.2157.0776.35104.32128.49133.35132.69
Adjusted Net Profit Adjusted Net Profit is a measure of company's profitability after accounting for all costs and adjusting for one time events. 5661,1682,0304,0386,3597,6799,0645,7634,2722,273
Net Op. Cash Flow (Rs. Cr.)
This refers to the amount of cash a company generates from the revenues less operating expenses.
1,8843,5104,8708,46612,32413,71215,45618,85122,54423,483
Debt to Cash Flow from Ops
Debt to CFO (Cash Flow from Operations) conveys the number of years it will take for a company to repay its debt, given the cash generated from operations.
CFO: It is the amount of cash generated by the company through its core business operations without looking at the impact of its capital structure. It indicates whether the company is able to generate sufficient cash from its operations to maintain and run its operations.
2.491.420.980.620.780.990.673.483.273.32
CAGR
The Growth rate helps you understand how the company has performed over different time frames.
CAGR Colour Code Guide
CAGR Colour Code Guide
  • >12% : Very Good
  • 8% to 12% : Somewhat Good
  • <8% : Not Good
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales
Net Sales is calculated by deducting excise duty, sales tax and other such deductible indirect taxes from the gross sales of a company.
36.1%24.4%24.3%12.4%
Adjusted EPS
Adjusted Earning per Share is the Company’s net profit per share after adjusting for extra-ordinary/exceptional items.
16.4%-18.6%-36.9%-46.8%
Book Value per Share
The total value that a company will fetch upon liquidation (if it is closed down), after settling all obligations is called its Book Value. Book value of a company includes only tangible assets. Book value allocated to each outstanding share is called Book Value per share
31.318.48.4-0.5
Key Financial Parameter The key financial ratios show the growth and sustainability of the Value Creation Index.
Performance Ratios: Colour Rating Guide
  • >12% : Very Good
  • 8% to 12% : Somewhat Good
  • <8% : Not Good
Debt to Equity Colour Rating Guide
  • 0 to 1 : Very Good
  • >1 to 2 : Somewhat Good
  • >2 or <0: Not Good
Return on Equity (%)
Return on Equity shows the amount of net profit generated as a percentage of shareholders equity. 
ROE measures a company's profitability over the money shareholders have invested. 
14.3326.6234.1342.8438.2930.226.27138.64.5
Operating Profit Margin (%)
Operating Profit Margin shows how much profit a company makes (before interest payment and taxes) on sales. It is advisable to look at the change in a company’s operating margin over time and compare the company's yearly or quarterly numbers to those of its competitors.
32.3834.7334.1239.4140.8640.0939.4933.6833.1630.95
Net Profit Margin (%)
NPM (Net Profit Margin) is the ratio of profit, net of taxes and interests to sales. It is advisable to look at changes in a company’s NPM over time and to compare them with the competitor’s NPM.
11.3314.5417.6422.1823.9121.0622.149.915.972.83
Debt to Equity
This ratio indicates the ratio of equity to debt the company employs to finance its operating assets.
1.111.120.650.460.440.470.261.351.461.55
Working Capital Days
This is the number of days that a company will take to convert its working capital into revenue.
947878758297114786669
Cash Conversion Cycle
Cash Conversion Cycle is a company's net working capital (creditors, debtors and inventory) expressed in terms of days
-96-120-158-158-153-140-124-131-143-130
Management Assessment
Management Assessment
An assessment of the trustworthiness of the management based on 5 important parameters. These parameters are colour coded as
Green (Very Good), Orange (Somewhat Good) and Red (Not Good)
What do we look at?
Management Assessment: An assessment of the trustworthiness of the management based
on 5 important parameters. These parameters are colour coded as Green (Very Good),
Orange (Somewhat Good) and Red (Not Good)
Corporate Governance
Corporate Governance
This refers to a set of processes or laws that affects the way a company is directed and controlled.
Board Credentials
Board credentials
This refers to the skill sets (qualification, experience, etc.) that the management team of a company possesses.
Promoter's holding
Promoter's holding
This refers to the stake that the promoters hold in a company and proportion of shares pledged.
Transparency
Transparency
Transparency refers to the practices that a company follows in the disclosure of important and necessary information.
Integrity
Integrity
Integrity refers to the application of honest and fair business practices.

Percentage Holding
65.32%
24.17%
10.51%

Pledged *0.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.00
*  Pledged shares as % of Promoter's holding (%)

Bharti Airtel’s consolidated 10 YEAR X-RAY performance has been good. It has been a market leader and its increasing subscriber base has helped the company grow its Sales with a CAGR of more than ~36% over the last 9 years. However, the EPS performance of the company has not been good. A declining trend is observed in EPS after FY10.

EPS performance: -Bharti Airtel clocked excellent EPS growth rates ... Read more

Bharti Airtel’s consolidated 10 YEAR X-RAY performance has been good. It has been a market leader and its increasing subscriber base has helped the company grow its Sales with a CAGR of more than ~36% over the last 9 years. However, the EPS performance of the company has not been good. A declining trend is observed in EPS after FY10.

EPS performance: -Bharti Airtel clocked excellent EPS growth rates till FY10. However, the next three years have been bad for the company. The company had to bear high interest burden due to the debt raised for acquiring Zain Telecom’s Africa business and for the 3G roll-out in India. At the same time, the performance in Africa has not been good leading to lower profits. Besides, the hyper competitive nature of the Indian telecom industry has led to continuous fall in tariffs leading to margin pressures. However, off-late Bharti Airtel along with other incumbent players has started concentrating on profitability and has raised tariffs.

Margins performance: -

Bharti Airtel Margins

Similar trend is observed in the margins of the company. The company’s margins were good and improved till FY10. After that, there was pressure on the margins. On the whole, low tariffs but high operating costs, high interest burden, high depreciation and amortization and the delayed turnaround of the African operations led to a fall in margins and EPS of the company.

High debt: - A big spike is seen in the company’s debt numbers in the years after FY10. The company had to raise debt in order to acquire Zain Telecom’s Africa business and for the 3G roll-out in India. This led to high Debt to Equity and Debt to Cash Flow from operations ratios in the years after FY10.

Value creation: -Like in other parameters, the company did well in terms of value creation till FY10. In the period from FY04 to FY10, the company was able to generate higher returns on the employed capital when compared to the cost incurred on this capital. After FY10, there was a huge fall in ROCE due to high debt and low profits. The post FY10 returns of capital employed were lower than the costs incurred on this capital leading to value destruction.On the whole, the 10 Year X-Ray performance of the company appears to be ORANGE (Somewhat Good).

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