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BHARTI AIRTEL 2017-18 Annual Report Analysis

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BHARTI AIRTEL 2017-18 Annual Report Analysis
Fri, 17 Aug

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 12.3% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 15.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 38.7% in FY18 as against 39.9% in FY17.
  • Depreciation charges and finance costs decreased by 2.7% YoY and 2.3% YoY, respectively.
  • Other income grew by 106.3% YoY.
  • Net profit for the year declined by 48.5% YoY.
  • Net profit margins during the year declined from 4.4% in FY17 to 2.6% in FY18.

BHARTI AIRTEL Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 954,683 836,879 -12.3%
Other income Rs m 1,206 2,488 106.3%
Total Revenues Rs m 955,889 839,367 -12.2%
Gross profit Rs m 380,920 323,799 -15.0%
Depreciation Rs m 197,730 192,431 -2.7%
Interest Rs m 95,466 93,255 -2.3%
Profit before tax Rs m 88,930 40,601 -54.3%
Tax Rs m 34,819 10,835 -68.9%
Profit after tax Rs m 42,414 21,835 -48.5%
Gross profit margin % 39.9 38.7
Effective tax rate % 39.2 26.7
Net profit margin % 4.4 2.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 9% and stood at Rs 2,056 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 2,506 billion as against Rs 2,333 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 674,563 695,344 3.1
 
Current Liabilities Rs m 634,597 782,399 23.3
Long-term Debt Rs m 896,373 849,420 -5.2
Total Liabilities Rs m 2,332,652 2,505,816 7.4
 
Current assets Rs m 182,038 334,990 84.0
Fixed Assets Rs m 1,890,736 2,056,355 8.8
Total Assets Rs m 2,332,652 2,505,816 7.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for BHARTI AIRTEL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 5.5, an decline from the EPS of Rs 10.6 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 370.7, stands at 79.0 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.6 times, while the price to sales ratio stands at 2.1 times.
  • The company's price to cash flow (P/CF) ratio stood at 6.9 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 238.8 209.4
TTM Earnings per share Rs 10.6 5.5
Diluted earnings per share Rs 10.6 5.5
Price to Cash Flow x 6.2 6.9
TTM P/E ratio x 79.0 79.0
Price / Book Value ratio x 2.0 2.6
Market Cap Rs m 1,481,636 1,481,636
Dividends per share (Unadj.) Rs 1.0 2.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 1.4x during FY18, from 1.9x 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 3.1% during FY18, from 6.3% 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 8.2% during FY18, from 11.0% 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 4.6% during FY18, from 5.9% 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 1.9 1.4
Debt to equity ratio x 1.3 1.2
Return on assets % 5.9 4.6
Return on equity % 6.3 3.1
Return on capital employed % 11.0 8.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 416.6 to Rs 370.7, registering a loss of Rs 45.9 or around 11.0%.

Meanwhile, the S&P BSE TECK Index is trading at Rs 7,604.5 (up 0.5%). Over the last one year it has moved up from 5,876.4 to 7,604.5, a gain of 1,728 points (up 29.4%).

Overall, the S&P BSE SENSEX is up 19.4% over the year.

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

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For the quarter ended September 2018, BHARTI AIRTEL has posted a net profit of Rs 859 m (down 88.8% YoY). Sales on the other hand came in at Rs 204 bn (down 6.2% YoY). Read on for a complete analysis of BHARTI AIRTEL's quarterly results.

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