Bharti Airtel Share Price is on a Bull Ride! On Friday, December 13, 2024, Bharti Airtel was the top gainer on the Nifty 50 index. The stock rose by +4.42% in a single day, closing at ₹1,685. It gained 5% over the week, showing strong momentum.
In the past year, Bharti Airtel has delivered a stellar return of 63%. This makes it the fourth-best performer on the Nifty 50 index for 2024. Only Trent, Mahindra & Mahindra (M&M), and Bharat Electronics (BEL) are ahead.
Market experts are bullish on the stock, maintaining a buy rating and forecasting further growth. However, Bharti Airtel lags behind in a few critical areas. So, is it really the right time to invest? Let’s dive into a detailed analysis of Bharti Airtel share price to uncover the answer.
Also read: GTL Infrastructure Share – Is GTL Infrastructure a Good Buy?
About Bharti Airtel
Bharti Airtel, an India-based multinational telecommunications company, was founded by Sunil Bharti Mittal in 1995, based in New Delhi. It has a presence in 18 countries in South Asia and Africa, with over 550 million customers.
Services – Airtel provides services in mobile voice, mobile data (2G, 3G, 4G, 5G), fixed-line broadband, digital television (Airtel Digital TV). It also offers enterprise solutions. The company is an early pioneer in launching 4G services in India and is also expanding its 5G network.
Essentials & Fundamentals- Bharti Airtel Share Price
Let’s look at the key fundamentals of Bharti Airtel shares:
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| Category | Metric | Value |
| Market Cap | Market Cap | ₹9,95,322 crores |
| Return Ratios | Return on Equity (ROE) | 14.9% |
| ROE (FY 2024) | 7.39% (Low) | |
| Return on Capital Employed (ROCE) | 13.1% | |
| Earnings | Earnings Per Share (EPS) | ₹21.6 |
| Valuation | Price-to-Earnings (P/E) | 82.56 (High) |
| PEG | 1.19 | |
| Debt | Debt-to-Equity (D/E) Ratio | 2.59 (High) |
| Interest Coverage Ratio | 3.52 |
–Market Cap: Bharti Airtel’s market capitalization is ₹9,95,322 crores. This makes it the fourth-largest company in India by market cap.
–Return Ratios: The company shows decent return ratios. ROE is 14.9%, and ROCE is 13.1%. However, last year’s ROE was only 7.39%, which is below the 10% benchmark. This indicates the company isn’t using shareholders’ capital efficiently to generate profits.
–Earnings Per Share (EPS): EPS stands at ₹21.6. A positive and growing EPS shows the company’s earnings are consistent and healthy.
Valuation Metrics
–Price-to-Earnings (P/E) Ratio: The stock is overvalued. It is trading at a high P/E of 82.56, compared to the sector’s P/E of 71.84. This means the stock price is higher than its intrinsic value, and investors are willing to pay a premium.
–Price-to-Book (P/B) Ratio: The P/B ratio is 10.8, which means the stock trades at 10.8 times its book value.
–PEG Ratio: The PEG ratio is 1.19, which is above the ideal level of 1. This also confirms that the stock is overvalued.
Debt Analysis
–Debt-to-Equity (D/E) Ratio: The company has a high D/E ratio of 2.59. This shows that most of its assets are financed through debt, which could be a concern for investors.
–Interest Coverage Ratio: The ratio is 3.52, which is above the safe level of 1.5. This means the company can easily meet its interest payments using its earnings (EBIT).
Profitability ratios
–Net Profit Margin (NPM): Bharti Airtel had a net profit margin of 4.97% in March 2024. In the latest quarter, it improved to 11.5%, showing better profitability.
Bharti Airtel has a strong market presence and consistent earnings. However, high debt levels and overvaluation are factors investors should keep in mind.
Annual & Quarterly Performance: Bharti Airtel Share Price
Annual Performance
-Bharti Airtel’s revenue for FY24 stood at ₹1,51,418 crores, an 8.1% growth year-on-year (YoY). Its 3-year CAGR is 14.4%.
-The company’s net profit for FY24 was ₹7,467 crores, which saw a decline of 10.5% YoY. Over the last three years, net profit CAGR has been -2%.
Quarterly Performance
-For the quarter ending September 2024, Bharti Airtel’s revenue was ₹41,728 crores, showing an 11.6% growth YoY.
-Net profit for the same quarter stood at ₹3,593 crores, a massive 168% increase YoY.
-The company also reported a 7.35% QoQ revenue growth, its highest in the last three years.
Stock Performance
-Bharti Airtel’s share price rose by 67.38% in the past year, outperforming its sector by 2.82%.
-Over three years, the stock delivered a 146.81% return, far ahead of the BSE Telecommunication index, which gave a 65.82% return.
Management’s Strategy and Outlook
Bharti Airtel is steadily growing its customer base. This quarter, it added 4.2 million smartphone users, while postpaid customers increased by 0.8 million. Average Revenue Per User (ARPU) improved to ₹233, up from ₹211 in Q1, showing strong growth.
Airtel’s balance sheet remains strong. The company continues to focus on smart capital spending and cutting down high-cost debt. This quarter, it prepaid a portion of DoT spectrum dues from 2016. In the last five quarters, Airtel has prepaid ₹32,000 crores of spectrum dues. (Source: ConCall-Q2 FY2025)
All business segments are gaining market share. Airtel’s strategy is simple and effective:
-Focus on high-quality customers
-Deliver a better user experience
-Keep digital services at the core
-Drive operational efficiency and cut waste
To strengthen its global connectivity, Airtel partnered with Sparkle for capacity on the Blue and Raman Submarine Cable Systems, connecting India and Italy.
Recent News & Challenges
Regulatory Notice(16-12-2024): Bharti Airtel has received a notice from the Department of Telecommunications (DoT) for allegedly violating subscriber verification norms. The company was fined ₹79,000 for the breach.
Details: The violation relates to the terms and conditions of subscriber verification under the License Agreement, as identified during a sample CAF audit for August 2024.
The filing stated that the maximum financial impact is limited to the penalty amount.
Technical Analysis
On the charts, Bharti Airtel’s stock is approaching “overbought” levels, with the Relative Strength Index (RSI) currently at 63.
What Does This Mean?
-RSI is a momentum indicator that measures the strength of recent price movements. An RSI above 70 signals that the stock is “overbought,” meaning its price may have risen too quickly and could be due for a correction. While an RSI of 63 doesn’t confirm overbought status yet, it indicates the stock is nearing that level, suggesting investors should proceed cautiously.
Expert’s Opinion
Analysts are optimistic about Bharti Airtel’s growth. Out of 35 analysts tracking the stock, 29 have a “buy” rating, 4 recommend “hold,” and 2 suggest “sell”.
Price Targets:
-The highest price target comes from New Street Research at ₹2,070, offering a potential upside of 22%.
-Avendus Spark has the lowest target on the stock, set at ₹1,120.
Market Insights:
-According to market expert Hemang Jani, the current risk-reward ratio favours Reliance Industries over Bharti Airtel when comparing the two leading telecom players. (Source: CNBC TV 18)
Bottom Line
To sum up, Bharti Airtel share price analysis highlights key takeaways. As a leader in the telecom sector, the company is well-positioned for growth in the coming years. Airtel has a 5G user base of 105 million and added 4.2 million smartphone customers this quarter. The company maintains strong financials with rising revenues, growing profits, a healthy balance sheet, and increasing cash flows from operations. Its fundamentals remain solid.
However, there are two concerns: High debt levels and Overvaluation, as revenue growth hasn’t fully met market expectations. Analysts remain bullish on the stock. Management’s clear vision outlines a promising growth trajectory for the company.
My View: I believe it’s better to wait a few quarters. This will give the company time to reduce its debt and allow valuations to cool down. Bharti Airtel is a market leader with significant growth potential, but patience is key to finding the right entry point.
Disclaimer
The blog is meant for informational purposes and serves the general analysis of the stocks. The contents provided here are based on careful research and analysis utilizing the fundamental and technical indicators over some time. The post does not consist any direct recommendation about Investing or trading in the securities market. Thorough research and careful consideration are necessary for individuals to fulfil their responsibility in making financial decisions. Seeking professional advice before making any financial decisions is always advisable.
