Intrinsic Value Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (TLK)

• Previous Close: $21.12
• Intrinsic Value: $9.69
• Upside potential: -54%

Stock Valuation Context

Business Model And Market Position

PT Telekomunikasi Indonesia Tbk (Telkom Indonesia) is the largest integrated telecommunications and digital services provider in Indonesia, operating in a highly competitive and regulated market. The company generates revenue through a diversified portfolio, including fixed-line, mobile, data, and digital services, with a strong focus on broadband and digital transformation. Telkom Indonesia holds a dominant market position, supported by its extensive infrastructure, including fiber-optic networks and 5G deployment, which strengthens its competitive edge in both urban and rural areas. The company’s strategic partnerships and investments in digital ecosystems, such as cloud computing and fintech, further solidify its leadership in Indonesia’s rapidly evolving telecom sector. Telkom Indonesia’s revenue model is anchored in subscription-based services, enterprise solutions, and digital platforms, ensuring stable cash flows while capitalizing on the country’s growing digital economy. Its market position is reinforced by government ownership, which provides regulatory advantages and aligns with national digital infrastructure goals.

Revenue Profitability And Efficiency

Telkom Indonesia reported revenue of IDR 149.97 trillion in FY 2024, reflecting its scale in the Indonesian telecom market. Net income stood at IDR 23.65 trillion, with a diluted EPS of IDR 23,873, indicating robust profitability. Operating cash flow was strong at IDR 61.6 trillion, though capital expenditures of IDR 29.99 trillion highlight significant investments in network expansion and digital infrastructure.

Earnings Power And Capital Efficiency

The company’s earnings power is evident in its consistent profitability and ability to generate substantial operating cash flow. Capital efficiency is balanced between reinvestment for growth and maintaining profitability, with capex directed toward enhancing network capacity and digital services. The high operating cash flow relative to net income underscores efficient working capital management and stable recurring revenue streams.

Balance Sheet And Financial Health

Telkom Indonesia’s balance sheet shows IDR 33.91 trillion in cash and equivalents, providing liquidity for operations and investments. Total debt of IDR 76.83 trillion indicates leverage, but the company’s strong cash flow generation supports debt servicing. The financial health is stable, with a focus on maintaining a balance between growth investments and debt management.

Growth Trends And Dividend Policy

Growth is driven by expanding broadband penetration, digital services, and 5G adoption. The company’s dividend policy, with a payout of IDR 1.1 per share, reflects a commitment to shareholder returns while retaining earnings for strategic investments. The dividend yield is modest, aligning with the company’s growth-oriented capital allocation strategy.

Valuation And Market Expectations

Telkom Indonesia’s valuation reflects its market leadership and growth potential in Indonesia’s telecom sector. Investors likely price in expectations of sustained revenue growth from digital services and infrastructure expansion, balanced against regulatory risks and competitive pressures. The stock’s performance is influenced by macroeconomic conditions and sector dynamics.

Strategic Advantages And Outlook

Telkom Indonesia’s strategic advantages include its extensive infrastructure, government backing, and focus on digital transformation. The outlook is positive, with opportunities in broadband, cloud services, and fintech, though challenges such as competition and regulatory changes persist. The company is well-positioned to capitalize on Indonesia’s digital growth, supported by its integrated service offerings and strong market presence.

Sources

Company filings, Bloomberg