Bharti Airtel reports 86.9% Net Income growth and 1.7 pp EBITDA Margin growth from 32.4% to 34.1%
28-04-2015 • About Bharti Airtel (
$BHARTIARTL) • By InTwits
Bharti Airtel reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Bharti Airtel is a growth stock: FY2015 revenue growth was 7.3%, 5 year revenue CAGR was 17.1% at FY2015 ROIC 11.7%
- Bharti Airtel has high CAPEX intensity: 5 year average CAPEX/Revenue was 16.9%. At the same time it's a lot of higher than industry average of 11.7%.
- CAPEX is quite volatile: 920 in FY2015, 1,890 in FY2014, 550 in FY2013, 1,300 in FY2012, 990 in FY2011
- The company has business model with average profitability: ROIC is at 11.7%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.1x while industry average is 2.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Bharti Airtel ($BHARTIARTL) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 595,383 | 714,508 | 769,045 | 857,461 | 920,394 | 7.3% |
| SG&A | 107,743 | 126,310 | 144,632 | 147,979 | 155,533 | 5.1% |
| EBITDA | 200,718 | 237,123 | 232,579 | 277,770 | 313,883 | 13.0% |
| Net Income | 60,467 | 42,594 | 22,757 | 27,727 | 51,835 | 86.9% |
Balance Sheet
|
|---|
| Cash | 9,575 | 20,300 | 16,078 | 49,808 | 11,719 | -76.5% |
| Short Term Debt | 84,370 | 193,078 | 98,226 | 209,039 | 211,389 | 1.1% |
| Long Term Debt | 532,338 | 497,154 | 569,137 | 549,919 | 452,283 | -17.8% |
Cash flow
|
|---|
| Capex | 109,952 | 144,436 | 125,722 | 114,159 | 146,411 | 28.3% |
Ratios
|
|---|
| Revenue growth | 42.3% | 20.0% | 7.6% | 11.5% | 7.3% | |
| EBITDA growth | 19.7% | 18.1% | -1.9% | 19.4% | 13.0% | |
| EBITDA Margin | 33.7% | 33.2% | 30.2% | 32.4% | 34.1% | 1.7% |
| Net Income Margin | 10.2% | 6.0% | 3.0% | 3.2% | 5.6% | 2.4% |
| SG&A, % of revenue | 18.1% | 17.7% | 18.8% | 17.3% | 16.9% | -0.4% |
| CAPEX, % of revenue | 18.5% | 20.2% | 16.3% | 13.3% | 15.9% | 2.6% |
| ROIC | 11.8% | 8.9% | 7.0% | 9.4% | 11.7% | 2.3% |
| ROE | 13.3% | 8.6% | 4.5% | 5.0% | 8.5% | 3.5% |
| Net Debt/EBITDA | 3.0x | 2.8x | 2.8x | 2.6x | 2.1x | -0.5x |
Revenue and profitability
The company's Revenue increased on 7.3% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.1 pp from 11.1% to 9.1% in FY2015.
SG&A as a % of Revenue showed almost no change in FY2015.
Net Income marign increased on 2.4 pp from 3.2% to 5.6% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 15.9% in FY2015. Bharti Airtel's CAPEX/Revenue decreased on 4.3 pp from 20.2% in FY2012 to 15.9% in FY2015. Average CAPEX/Revenue for the last three years was 15.2%.
Return on investment
The company operates at low ROIC (11.68%) and ROE (8.52%). ROIC increased on 2.3 pp from 9.4% to 11.7% in FY2015. ROE increased on 3.5 pp from 5.0% to 8.5% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.1x and Debt / EBITDA is 2.1x. Net Debt / EBITDA dropped on 0.5x from 2.6x to 2.1x in FY2015. Debt dropped on 12.6% in FY2015 while cash dropped on 76.5% in FY2015.
Appendix 1: Peers in Telecom Services
Below we provide Bharti Airtel benchmarking against other companies in Telecom Services industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Idea Cellular ($IDEA) | | 26.2% | 15.0% | 18.0% | 19.3% |
| Mahanagar Telephone Nigam ($MTNL) | -11.1% | -8.1% | 1.6% | -0.6% | |
| |
|---|
| Median (2 companies) | -11.1% | 9.1% | 8.3% | 8.7% | 19.3% |
|---|
| Bharti Airtel ($BHARTIARTL) | | 20.0% | 7.6% | 11.5% | 7.3% |
Top companies by EBITDA margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Idea Cellular ($IDEA) | 24.6% | 26.1% | 26.8% | 31.5% | 34.4% |
| Mahanagar Telephone Nigam ($MTNL) | -31.5% | -52.0% | -82.7% | -25.1% | |
| |
|---|
| Median (2 companies) | -3.5% | -12.9% | -28.0% | 3.2% | 34.4% |
|---|
| Bharti Airtel ($BHARTIARTL) | 33.7% | 33.2% | 30.2% | 32.4% | 34.1% |
Top companies by CAPEX/Revenue, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Idea Cellular ($IDEA) | 55.4% | 24.3% | 15.6% | 14.0% | 13.4% |
| Mahanagar Telephone Nigam ($MTNL) | 33.8% | 21.9% | 21.1% | 5.7% | |
| |
|---|
| Median (2 companies) | 44.6% | 23.1% | 18.3% | 9.8% | 13.4% |
|---|
| Bharti Airtel ($BHARTIARTL) | 18.5% | 20.2% | 16.3% | 13.3% | 15.9% |
Top companies by ROIC, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Idea Cellular ($IDEA) | 6.2% | 8.1% | 8.8% | 11.0% | 12.1% |
| Mahanagar Telephone Nigam ($MTNL) | -19.9% | -24.0% | -39.1% | -14.0% | |
| |
|---|
| Median (2 companies) | -6.9% | -8.0% | -15.2% | -1.5% | 12.1% |
|---|
| Bharti Airtel ($BHARTIARTL) | 11.8% | 8.9% | 7.0% | 9.4% | 11.7% |
Top companies by Net Debt / EBITDA
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Idea Cellular ($IDEA) | 3.1x | 2.6x | 2.3x | 2.5x | 2.3x |
| |
|---|
| Median (1 company) | 3.1x | 2.6x | 2.3x | 2.5x | 2.3x |
|---|
| Bharti Airtel ($BHARTIARTL) | 3.0x | 2.8x | 2.8x | 2.6x | 2.1x |
