BHARTIARTL.NS · NSI · Communication Services
Bharti Airtel Limited
Also onConsensus Drift
Implied value per share
INR 1839.91
Market price
INR 1893.30
Implied upside
-2.8%
5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case
Value Per Share
Same forecast, different terminal treatment. Percentages vs price.
Forecast Cashflows
Reporting currency (INR). Outflows negative.
| Line | FY27 | FY28 | FY29 | FY30 | FY31 | CAGR |
|---|---|---|---|---|---|---|
| Revenue | INR 2423.7bn | INR 2784.4bn | INR 3198.8bn | INR 3674.8bn | INR 4221.7bn | +14.9% |
| EBIT | INR 667.8bn | INR 767.2bn | INR 881.4bn | INR 1012.5bn | INR 1163.2bn | +14.9% |
| NOPAT | INR 499.5bn | INR 573.9bn | INR 659.3bn | INR 757.4bn | INR 870.1bn | +14.9% |
| Add depreciation & amortisation | INR 629.4bn | INR 723.1bn | INR 830.7bn | INR 954.3bn | INR 1096.3bn | +14.9% |
| Less capital expenditure | INR -550.5bn | INR -632.5bn | INR -726.6bn | INR -834.7bn | INR -958.9bn | +14.9% |
| Less increase in working capital | INR 69.9bn | INR 80.3bn | INR 92.3bn | INR 106.0bn | INR 121.8bn | -14.9% |
| Free cashflow to firm | INR 648.3bn | INR 744.8bn | INR 855.6bn | INR 983.0bn | INR 1129.3bn | +14.9% |
| Discount factor | 0.9578 | 0.8786 | 0.8060 | 0.7394 | 0.6783 | - |
| Present value | INR 620.9bn | INR 654.4bn | INR 689.7bn | INR 726.8bn | INR 766.0bn | +5.4% |
| Present Value Of The Forecast | INR 3457.9bn | |||||
Discount Rate
Source shown per component. All overridable above.
| Risk-free rate | 6.80% | INR assumption - no free live source available for this market (assumption) |
| Equity risk premium | 8.00% | Market assumption |
| Beta | 0.327 | Reported -0.004, pulled toward 1.0 (Blume) |
| Cost of equity | 9.42% | Risk-free + beta x equity risk premium |
| Cost of debt | 8.72% | Interest expense / average total debt |
| Market capitalisation | INR 11811.7bn | 85.8% of capital |
| Total debt | INR 1954.1bn | 14.2% of capital, book value as a proxy |
| Tax rate | 25.2% | Effective, capped at statutory |
| WACC | 9.01% | E/V x Re + D/V x Rd x (1 - t) |
Terminal Value
Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.
Perpetuity growth at 2.50%
72% of EV
- Forecast FCFF, final year
- INR 1129.3bn
- Capex at depreciation, working capital in reinvestment
- INR 1053.2bn
- Less reinvestment at g/ROIC (19.5% of NOPAT)
- INR -204.9bn
- Capitalised
- INR 848.4bn
- ROIC (reported)
- 12.9%
- Terminal value, undiscounted
- INR 13362.0bn
- Terminal value, discounted
- INR 9063.8bn
- Enterprise value
- INR 12521.7bn
- Less net debt
- INR 1452.1bn
- Equity value
- INR 11069.5bn
Exit at 11.0x EBITDA
83% of EV
- Terminal value, undiscounted
- INR 24863.5bn
- Terminal value, discounted
- INR 16865.6bn
- Enterprise value
- INR 20323.5bn
- Less net debt
- INR 1452.1bn
- Equity value
- INR 18871.3bn
Spread between methods: 52%.
Sensitivity
Value per share (INR) by discount rate and long-run growth.
| Long-run growth | |||||
|---|---|---|---|---|---|
| Discount rate | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
| 7.01% | 2462.89 | 2581.77 | 2725.90 | 2904.73 | 3133.12 |
| 8.01% | 2052.58 | 2121.84 | 2202.80 | 2298.97 | 2415.40 |
| 9.01% | 1751.40 | 1792.82 | 1839.90 | 1894.04 | 1957.17 |
| 10.01% | 1520.89 | 1545.69 | 1573.20 | 1604.01 | 1638.86 |
| 11.01% | 1338.75 | 1353.19 | 1368.82 | 1385.87 | 1404.63 |
Outlined: this model. Green text: above today's price of 1893.30. Shading: distance from this model's own value.
Priced In
What each input would have to be to justify the current price, one at a time.
| Input | Model | Implied | Gap |
|---|---|---|---|
| Revenue growth, every year | 14.9% | 15.5% | +0.6pp |
| EBIT margin | 27.6% | 28.4% | +0.9pp |
| Discount rate | 9.0% | 8.8% | -0.2pp |
Live formulas, not pasted numbers - edit a driver and the workbook reprices.
Yahoo Finance and RBA data. General information, not advice. Methodology.