Is Now The Time To Put Bharti Airtel (NSE:AIRTELPP) On Your Watchlist?

Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Bharti Airtel (NSE:AIRTELPP). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Bharti Airtel with the means to add long-term value to shareholders.

We've discovered 2 warning signs about Bharti Airtel. View them for free.

Bharti Airtel's Improving Profits

Over the last three years, Bharti Airtel has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. As a result, we'll zoom in on growth over the last year, instead. In impressive fashion, Bharti Airtel's EPS grew from ₹14.78 to ₹40.40, over the previous 12 months. It's a rarity to see 173% year-on-year growth like that.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. EBIT margins for Bharti Airtel remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 9.6% to ₹1.6t. That's progress.

You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.

See our latest analysis for Bharti Airtel

While we live in the present moment, there's little doubt that the future matters most in the investment decision process. So why not check this interactive chart depicting future EPS estimates, for Bharti Airtel?

Are Bharti Airtel Insiders Aligned With All Shareholders?

We would not expect to see insiders owning a large percentage of a ₹11t company like Bharti Airtel. But thanks to their investment in the company, it's pleasing to see that there are still incentives to align their actions with the shareholders. Indeed, they hold ₹2.0b worth of its stock. That's a lot of money, and no small incentive to work hard. While their ownership only accounts for 0.02%, this is still a considerable amount at stake to encourage the business to maintain a strategy that will deliver value to shareholders.

Should You Add Bharti Airtel To Your Watchlist?

Bharti Airtel's earnings per share growth have been climbing higher at an appreciable rate. That EPS growth certainly is attention grabbing, and the large insider ownership only serves to further stoke our interest. At times fast EPS growth is a sign the business has reached an inflection point, so there's a potential opportunity to be had here. So based on this quick analysis, we do think it's worth considering Bharti Airtel for a spot on your watchlist. Even so, be aware that Bharti Airtel is showing 2 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in IN with promising growth potential and insider confidence.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.