Bharti Airtel Downgraded to 'Hold' by MarketsMOJO Due to Recent Financial Performance and Market Trends

Bharti Airtel, a leading telecommunication service provider in India, has recently been downgraded to a 'Hold' by MarketsMOJO on October 28, 2024. This decision was based on the company's current financial performance and market trends.
Despite a healthy long-term growth rate of 12.99% in Net Sales and 55.56% in Operating Profit, the company's stock has been downgraded due to its recent performance. The company has declared positive results for the last three consecutive quarters, with its highest operating cash flow at Rs 78,898.20 Cr and return on capital employed at 14.41%.

Technically, the stock is currently in a mildly bullish range, with its MACD and KST technical factors also showing a bullish trend. Additionally, the company has a high institutional holding of 43.91%, indicating that these investors have better resources to analyze the company's fundamentals.

Bharti Airtel has consistently outperformed the BSE 500 index in the last three years, with a return of 81.91%. With a market cap of Rs 9,51,584 cr, it is the largest company in the telecommunication sector, constituting 83.08% of the entire sector. Its annual sales of Rs 151,048.80 are also 66.85% of the industry.

However, the company has a high debt-to-equity ratio of 0 times, indicating a high level of debt. This has resulted in a low return on equity of 8.82%, signifying low profitability per unit of shareholders' funds. The company also has an expensive valuation with an enterprise value to capital employed ratio of 4.1.

Despite generating a return of 81.91% in the last year, the company's profits have only risen by 4.9%, resulting in a high PEG ratio of 28.2. Overall, while Bharti Airtel remains a dominant player in the telecommunication industry, its recent financial performance and high debt levels have led to a 'Hold' rating by MarketsMOJO.