BHARTI AIRTEL 2017-18 Annual Report Analysis

Sat, 31 Mar

BHARTI AIRTEL has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

BHARTI AIRTEL Income Statement Analysis

• Operating income during the year fell 13.4% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 14.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 35.4% in FY18 as against 35.6% in FY17.
• Depreciation charges decreased by 2.7% and finance costs decreased by 2.3% YoY, respectively.
• Other income declined by 22.3% YoY.
• Net profit for the year declined by 64.9% YoY.
• Net profit margins during the year declined from 3.3% in FY17 to 1.4% in FY18.

BHARTI AIRTEL Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	954,683	826,388	-13.4%
Other income	Rs m	19,698	15,310	-22.3%
Total Revenues	Rs m	974,381	841,698	-13.6%
Gross profit	Rs m	340,282	292,437	-14.1%
Depreciation	Rs m	197,730	192,431	-2.7%
Interest	Rs m	95,466	93,255	-2.3%
Profit before tax	Rs m	66,784	22,061	-67.0%
Tax	Rs m	34,819	10,835	-68.9%
Profit after tax	Rs m	31,965	11,226	-64.9%
Gross profit margin	%	35.6	35.4
Effective tax rate	%	52.1	49.1
Net profit margin	%	3.3	1.4

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BHARTI AIRTEL Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 782 billion as compared to Rs 635 billion in FY17, thereby witnessing an increase of 23.3%.
• Long-term debt down at Rs 849 billion as compared to Rs 896 billion during FY17, a fall of 5.2%.
• Current assets rose 84% and stood at Rs 335 billion, while fixed assets rose 1% and stood at Rs 2,141 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 2,476 billion as against Rs 2,306 billion during FY17, thereby witnessing a growth of 7%.

BHARTI AIRTEL Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	670,498	694,562	3.6
Current Liabilities	Rs m	634,597	782,400	23.3
Long-term Debt	Rs m	896,373	849,420	-5.2
Total Liabilities	Rs m	2,306,457	2,476,487	7.4
Current assets	Rs m	182,038	334,991	84.0
Fixed Assets	Rs m	2,124,419	2,141,496	0.8
Total Assets	Rs m	2,306,457	2,476,487	7.4

BHARTI AIRTEL Cash Flow Statement Analysis

• BHARTI AIRTEL's cash flow from operating activities (CFO) during FY18 stood at Rs 299 billion, an improvement of 5.6% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -280 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs 19 billion, an improvement of 647% on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs 38 billion from the Rs -28 billion net cash flows seen during FY17.

BHARTI AIRTEL Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-17	Mar-18
Cash Flow from Operating Activities	Rs m	282,799	298,538	5.6%
Cash Flow from Investing Activities	Rs m	-306,044	-279,676	-
Cash Flow from Financing Activities	Rs m	-3,514	19,205	-
Net Cash Flow	Rs m	-27,515	38,348	-

Current Valuations for BHARTI AIRTEL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2.8, an decline from the EPS of Rs 8.0 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 398.9, stands at 209.1 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.4 times, while the price to sales ratio stands at 1.9 times.
• The company's price to cash flow (P/CF) ratio stood at 8.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Sales per share (Unadj.)	Rs	238.8	206.7
TTM Earnings per share	Rs	8.0	2.8
Diluted earnings per share	Rs	5.4	1.9
Price to Cash Flow	x	9.0	8.8
TTM P/E ratio	x	64.4	209.1
Price / Book Value ratio	x	2.0	2.6
Market Cap	Rs m	1,368,510	1,795,432
Dividends per share (Unadj.)	Rs	1.0	5.3

Ratio Analysis for BHARTI AIRTEL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.4x during FY18, from 0.3x during FY17. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 1.2x during FY18, from 1.7x during FY17. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 1.6% during FY18, from 4.8% during FY18. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at 7.5% during FY18, from 10.4% during FY17. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company declined and down at 4.2% during FY18, from 5.5% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Current ratio	x	0.3	0.4
Debtors’ Days	Days	18	26
Interest coverage	x	1.7	1.2
Debt to equity ratio	x	1.3	1.2
Return on assets	%	5.5	4.2
Return on equity	%	4.8	1.6
Return on capital employed	%	10.4	7.5

To see how BHARTI AIRTEL has performed over the last 5 years, please visit here.

BHARTI AIRTEL Share Price Performance

Over the last one year, BHARTI AIRTEL share price has moved up from Rs 350.0 to Rs 398.9, registering a gain of Rs 49.0 or around 14.0%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 6,513.3 (down 0.7%). Over the last one year it has moved up from 5,771.5 to 6,513.3, a gain of 742 points (up 12.9%).

Overall, the S&P BSE SENSEX is up 12.1% over the year.

(To know more, check out historical annual results for BHARTI AIRTEL and quarterly results for BHARTI AIRTEL)

Read: Latest Annual Report Analysis of BHARTI AIRTEL