Bharti Hexacom (BHARTIHEXA)

FairStock Score: 63/100 — STEADY

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• ROE of 29.58% and ROCE of 17.44% show strong capital efficiency
• Profit growth of 40.64% on 13.56% sales growth demonstrates operating leverage
• Piotroski F-Score of 8/9 indicates solid earnings quality
• Free cash flow of ₹2,242 Cr provides financial flexibility
• Altman Z-Score of 4.11 points to low bankruptcy risk

Concerns

• P/E of 45.59 and P/B of 13.13 leave little margin of safety
• Graham Number of ₹373.61 is far below the current price, showing -330% margin of safety
• EV/EBITDA of 116.48 appears extremely expensive on cash earnings
• Dividend yield of 0.62% is thin for income-seeking investors

AI Analysis

Let me look at Bharti Hexacom as a business first. It earns a strong 29.58% return on equity and 17.44% return on capital employed, with sales up 13.56% and profits up 40.64%. That kind of compounding is attractive. The Piotroski score of 8/9 tells me the earnings quality is genuine, and an Altman Z-Score of 4.11 suggests the balance sheet is not under distress, despite debt/equity of 1.24. Free cash flow of ₹2,242 Cr supports the story. This is a good franchise with 70% promoter holding and an entrenched position in its telecom circles. But I am a value investor, and price matters. At ₹1,558.25, the stock trades at 45.59 times earnings and 13.13 times book. That is not a bargain. The Graham number is only ₹373.61, implying a negative margin of safety of -330%. Even if I respect the DCF intrinsic value of ₹2,400.50, I cannot anchor on a model full of assumptions. The dividend yield of 0.62% is thin for patient capital. This is a fast grower with solid execution. If it can keep profit growth near 40% while maintaining high ROE, the P/E will come down, but the market is already banking on that. I need a cushion in price. At 45 times earnings, I am paying for perfection. I would rather wait for a lower entry point or a longer track record. Quality is there, but valuation leaves little room for error.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer