TLS - telstra

 TLS

21-7-26

https://www.marketindex.com.au/asx/tls

https://www.tradingview.com/symbols/ASX-TLS/financials-overview/

https://stockanalysis.com/quote/asx/tls/statistics/

https://koalagains.com/stocks/ASX/tls

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Over the past five years, ASX:TLS (Telstra Group) has experienced steady revenue and profit growth, an efficient reduction in capital intensity, strong and improving Return on Equity (ROE), and stable debt levels as part of a broader strategy to boost capital returns for shareholders. [1, 2, 3, 4, 5]

Profit & Revenue

Telstra has maintained a strong core telecom infrastructure, yielding consistent top-line figures and improved underlying profitability: [1, 2, 3]

• Revenue: Has hovered around the $22.5B} to $23.1B AUD range annually.
• Net Profit After Tax (NPAT): Showed positive momentum, rising from roughly 1.68B AUD in 2022 to reach $2.17B AUD in FY2025 and posting a further 8.1% increase in underlying NPAT for 1H FY2026.
• Gross Profit: Consistently tracks near $11.3B to $14.6B AUD depending on reported expenses and amortization models. [1, 2, 3, 4, 7]

Debt Profile

Telstra maintains a balanced, defensive balance sheet while heavily investing in networks and 5G: [1, 2, 3]

• Long-term Debt: Generally hovers between $12.5B and $13B AUD.
• Debt to Equity: Sits around 119%, which is standard for asset-heavy telecom infrastructure giants but is carefully managed with disciplined cost reductions and optimized capital expenditure. [1, 2, 3, 4, 5]

Return on Equity (ROE) & Returns

ROE has been on an upward trajectory, reflecting stronger capital execution and share buybacks: []

• ROE Trends: Reached a 5-year peak of \(15.1\%\) at the end of FY2025 and continued to expand to over \(16\%\). This is above Telstra's historical 10-year median of \(13.6\%\). [1, 2]
• Capital Returns: Management has consistently delivered reliable dividends (yielding around \(4.0\% - 4.2\%\)) and actively executed massive on-market share buy-backs, including a \(\$1.25\text{B}\) AUD buy-back program. [1, 2, 3]

Share Price Performance

Over the last 5 years, TLS shares have provided a total return of approximately \(32.8\%\). The stock has historically been treated as a defensive income provider rather than a high-growth asset. [1, 2, 3, 5]

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As of July 2026, Telstra Group Limited (ASX:TLS) trades at a trailing twelve months (TTM) P/E ratio of approximately 24.4x to 24.9x, which sits roughly 10% above its 10-year median P/E ratio of 22.51. [1, 2, 3]

Over the last 10 years, Telstra's valuation multiple has experienced distinct phases: a low-multiple utility period (2016–2018), a sharp re-rating due to compressed earnings during the NBN rollout transition, and a sustained higher-multiple period (2021–2026) as mobile pricing power improved.

10-Year Historical P/E Ratio Data

The tracking table below presents the annual calendar year-end P/E ratios for Telstra on Companies Market Cap, supplemented by Trailing Twelve Month (TTM) fiscal data from GuruFocus and Finbox: [1, 2, 3]

Year	Average / Year-End P/E Ratio	Valuation Context & Drivers
2026 (Current)	24.5x – 24.9x	Stabilised mobile infrastructure monetization; pricing indexation.
2025	26.8x	Peaked mid-year near 28.5x on high investor demand for defensive yield.
2024	25.2x	Retreated to a fiscal low of 22.9x before rebounding on clear mobile growth.
2023	24.4x	Consolidated valuation multiple as underlying core earnings expanded.
2022	23.7x	Significant re-rating following corporate restructuring into separate "Infraco" units.
2021	18.1x	Multiple expanded as the NBN headwind ceased eating into year-on-year profits.
2020	16.9x	COVID-19 defensive premium supported the multiple despite broader market volatility.
2019	16.7x	Spike in the statistical P/E ratio due to a massive, temporary drop in net profit.
2018	6.28x	Multi-year low. Caused by severe earnings pressure from NBN migration and dividend cuts.
2017	8.75x	De-rating accelerated as the financial impact of the NBN rollout became clear.
2016	7.30x	Valued as a low-growth legacy utility while earnings peaked right before the NBN impact.

3 Key Trends Driving the 10-Year Multiples

If you are evaluating Telstra's structural changes over this past decade, consider these core fundamental phases:

The NBN Earnings Compression (2016–2019): Historically, TLS traded at much lower optical P/E ratios (often sub-10x). This occurred because its structural earnings were artificially high from legacy wholesale copper monopolies. When the National Broadband Network (NBN) forced a shift to lower-margin retail reselling, earnings plummeted faster than the stock price, mathematically driving the P/E multiple higher by 2019. [1, 2, 3]
Infrastructure Carve-out & Premium (2021–2025): Post-2020, Telstra structurally split its business into T22/T25 segments (Amplitel, InfraCo). Investors began valuing Telstra's world-class physical infrastructure similarly to infrastructure funds, assigning it a much more aggressive structural multiple (mid-20s) compared to its historical telco average. [1]
Mobile Market Rationalization (Recent Years): The elevated P/E ratio of the mid-2020s reflects a more rational Australian mobile market where Tier-1 carriers regularly lift postpaid plan prices inline with CPI, providing a predictable defensive earnings stream that command premium equity multiples. [1, 2, 3]

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Over the last 10 years, Telstra Group (ASX:TLS) has experienced an ROIC that generally hovered near or slightly below its estimated WACC through the NBN-transition and restructuring lows (dipping to roughly 4.2% around 2021), before recovering toward an ROIC of 6.6% to 8.8% against a relatively steady WACC averaging roughly 5.3% to 7.0%. [1, 2, 3, 4]

ROIC Trends Over the Decade

Early-to-Mid Period (2016–2021): Telstra's Return on Invested Capital (ROIC) compressed significantly due to NBN multi-technology mix headwinds and margin pressures, dropping to a low of about 4.2% in FY21. [1]
Recent Recovery (2022–2026): As the NBN rollout headwinds stabilized and the T22/T25 strategy took effect, ROIC climbed steadily, reaching roughly 6.6% to 9.06% in recent trailing data. [1, 2, 3]

WACC Trends Over the Decade

Cost of Capital: Telstra’s Weighted Average Cost of Capital (WACC) has tracked tightly in a range between 5.3% and 7.7% over the decade, supported by a conservative balance sheet and a relatively low debt-to-equity weighting. [1, 2]
10-Year Median: The 10-year median WACC sits around 5.3%–5.5% depending on shifting risk-free rates and market risk premiums, while current estimates hover around 5.5% to 7.7%. [, 2]

Value Creation Dynamics

Value Destruction Phase: During the peak earnings compression years (roughly 2018–2021), Telstra's ROIC dropped below its WACC, implying a temporary destruction of economic value on incremental capital. [1]
Value Neutral/Creation Phase: With ROIC recovering to the 7%–9% range and WACC staying near 5.5%–7%, Telstra has returned to generating a modest economic spread (ROIC exceeding WACC) in recent periods. [1, 2, 4]

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Telstra Group Limited (ASX:TLS) has maintained an EBITDA margin (EBITDA as a percentage of total income/revenue) generally ranging between 32% and 40% over the past decade, driven heavily by its mobile business growth and structural shifts from the nbn transition. [1, 2, 3, 4]

Historical EBITDA Margins (Approximate Financial Year Averages)

FY 2025: ~38.1% (EBITDA of $9,002M on total income of $23,610M)
FY 2024: ~37.3% (EBITDA of $8,755M on total income of $23,482M)
FY 2023: ~34.5%–35.5%
FY 2022: ~32.4%
FY 2021: ~31.8%
FY 2020: ~34.8% (Impacted heavily by nbn headwind peaks)
FY 2019: ~35.2%
FY 2018: ~38.4%
FY 2017: ~39.1%
FY 2016: ~39.5% [1, 2, 3, 4, 5]

Note: Exact percentages vary slightly depending on whether calculations use statutory reported EBITDA, underlying EBITDA, or EBITDA after leases (EBITDAaL). You can track current live metrics via Morningstar Australia or Market Index. [1, 2, 3, 4]

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