Mehabe score: 6 G Factor: 4 Piotski Score: 4 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 4 and Piotski score of 4.
Description
Bharti Airtel Ltd is one of the world’s leading providers of telecommunication services with presence in 18 countries representing India, Sri
Lanka, 14 countries in Africa. #
Main Points
Revenue Breakup#
Mobile (India) – 49.8%
Africa – 25.8%
Airtel business – 12.9%
Homes – 2.1%
Digital Services – 2.7%
Towers – 6.4%Site:BHARTIARTLMain Symbol:BHARTIARTL
Stock trades at 565.0, above its 50dma 539.75. It also trades above its 200dma 529.5. The stock remains bullish on techicals
The 52 week high is at 623.00 and the 52week low is at 394.00
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– Stock is trading at 5.26 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 0.83% over past five years.
– has a low return on equity of -22.10% for last 3 years.
-Promoter holding has decreased over last 3 years: -11.31%
Competition
– The industry trades at a mean P/E of 33.0x. Bharti Airtel trades at the industry’s max P/E of 280.12x. BHARTIARTL trades at a P/E of x
– Industry’s mean G-Factor is 1.9 while the mean Piotski score is 8.0. BHARTIARTL has a G-Factor of 4 and Piotski scoreof 4.
– Average 1 month return for industry is 6.6%. The max 1- month return was given by Tejas Networks: a return of 48.04 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 26854.0 cr compared to Rs 23939.0 cr for period ended Jun 2020, a rise of 12.2%
Operating Profits reported at Rs 12980.0 cr for period ended Jun 2021 vis-vis 10408.0 for period ended Jun 2020 .
Operating Margins expanded 485.8 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 0.52 compared to Rs 1.38 for previous quarter ended Mar 2021 and Rs -29.21 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 104179.0 cr for period ended TTM vis-vis sales of Rs 100616.0 cr for the period ended Mar 2021, a growth of 3.4%. The 3 year sales cagr stood at 8.8%.
Operating margins expanded to 46.0% for period ended TTM vis-vis 45.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 1133.0 cr for period ended TTM vis-vis sales of Rs -15084.0 cr for the period ended Mar 2021, rising 1431.3%.
Company recorded a healthy Net Profit CAGR of 40.3% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 48205.0 cr for period ended Mar 2021 vis-vis Rs 18129.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The stock has given a return of 3% on a 1 Year basis vis-vis a return of 18% over the last 3 Years. – The compounded sales growth on a TTM bassis is 15% vis-vis a compounded sales growth of 7% over the last 3 Years. – The compounded profit growth on a TTM basis is 53% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 18.12% vis-vis 18.57% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 5.32% vis-vis 5.16% for Mar 2021
Conclusion
– – Stock is trading at 5.26 times its book value
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 0.83% over past five years.
– has a low return on equity of -22.10% for last 3 years.
-Promoter holding has decreased over last 3 years: -11.31%
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 539.75 and is trading at 565.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
