final telecom

8/4/2019 Final Telecom

1/23

Telecom Industry


2/23

Overview of Telecom Industry Indian Telecom Services

Three types of players exists in ' TelecomIndustry India ' community -

State owned companies like - BSNL and

MTNL

Private Indian owned companies like -

Reliance Infocomm and TataTeleservices

Foreign invested companies like

Hutchison-Essar, Bharti Tele-Ventures,

Escotel, Idea Cellular, BPL Mobile,

Spice Communications etc

Telecom Services India


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Overview Supply

Demand

Barriers to entry

Bargaining power of suppliers

Bargaining power of customers

Competition


4/23

Overview-Financial Year 09

49% YoY increase in its subscriber base during the 12-

month period

Growth remained robust in the GSM mobile space

India's mobile subscriber base grew by 50% YoY, from261 m to 391 m


5/23

Wireless Subscribers (in Million)


6/23

Ratio Analysis


7/23

Ratio Analysis Bharti Airtel

Ratios Mar - 07 Mar - 08 Mar - 09 % Change Reason

Current Ratio 0.47 0.57 0.69 47 Cash & Bank

NP Margin (%) 22.46 23.99 24.10 5.3 Service Income

EPS 21.27 32.9 40.79 91 Profit after tax

PE Ratio 17.94 12.55 7.67 -57.2 Market Price

Debt Equity 0.47 0.33 0.28 -40.4 Equity

Debt Asset 0.32 0.24 0.22 -31.3 Fixed Assets

Interest Coverage 26.47 29.51 30.38 14.7 EBIT

Debtors Turnover 14.31 12.28 12.78 -10.7 Debtors

Asset Turnover 0.75 1.03 1 33.33 Fixed Assets

ROCE (%) 29.06 27.95 28.4 -2.2 EBIT

RONW (%) 35.35 30.94 28.13 -20.4 Equity


8/23

Ratio Analysis Idea Cellular


Current Ratio 0.87 0.43 0.98 12.6 Cash & Bank

NP Margin (%) 11.44 15.33 9.91 -13.3 Net Sales

EPS 1.94 3.96 3.23 66 Profit after tax


Debt Equity 1.95 1.84 0.67 -65.6 Equity

Debt Asset 0.66 0.65 0.4 -39.3 Assets

Interest Coverage 2.99 3.89 2.55 -14.7 EBIT

Debtors Turnover 35.89 38.28 39.32 3.9 Net Sales

Asset Turnover 0.62 0.61 0.74 19.3 Net Sales

ROCE (%) 14.96 16.92 11.2 -25.1 EBIT

RONW (%) 23.04 29.48 8.87 -61.5 PAT


9/23

Ratio Analysis Reliance Comm


Current Ratio 1.77 0.95 1.45 -18.1 Current Liabilities

NP Margin (%) 18.63 17.45 30.47 63.5 Non-rec Income

EPS 11.78 12.53 23.27 97.5 Profit after tax


Debt Equity 0.71 0.82 0.6 -15.4 Long term debt

Debt Asset 0.42 0.45 0.37 -11.9 Long term debt

Interest Coverage 8.43 5.01 2.59 -69.2 Interest Exp

Debtors Turnover 15.9 15.61 11.72 -26.2 Debtors

Asset Turnover 0.7 0.77 0.76 8.5 Sales

ROCE (%) 10.96 9.65 7.01 -72.5 Equity Share

CapitalRONW (%) 11.74 10.41 9.29 -20.8


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ANALYSIS OF CASH FLOW

STATEMENT OF TELECOM

SECTOR


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RELIANCE COMMUNICATIONSMar '07 Mar '08 Mar '09

Net Profit Before Tax 2420.85 2604.09 4815.07

Net Cash From Operating Activities 10469.12 2982.8 1884.87

Net Cash (used in)/from

Investing Activities -4883.86 -11263.87 -7650.54

Net Cash (used in)/from Financing Activities 4645.92 6234.75 6405.25

Net (decrease)/increase In Cash and Cash

quivalents 10231.18 -2046.32 639.58

Opening Cash & Cash Equivalents -10162.73 2240.4 205.57

Closing Cash & Cash Equivalents 68.45 192.66 845.15


12/23

OPERATING ACTIVITY

- I Increase in the financial income from 715-1045 i.e 44%.

- I Increase in debtors from 425

1641 i.e 286%.

INVESTING ACTIVITY

- I Additions of fixed assets from 5250 17393i.e 231%.

- I Sale of fixed assets from .26 to 10 .

FINANCING ACTIVITY

- I Proceeds from short-term borrowings from 2629 9639 i.e 266%.

- I Proceeds from debentures of 3000.

ANALYSIS OF CASH FLOW STATEMENT OF

RELIANCE COMMUNICATIONS:


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Mar '07 Mar '08 Mar '09





Net Cash (used in)/from Financing Activities 340.13 898.03 -672


quivalents 473.03 -290.53 286.77

Opening Cash & Cash Equivalents 307.43 793.47 503.31


BHARTI AIRTEL


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ANALYSIS OF CASH FLOW STATEMENT OF

BHARTI AIRTEL:

OPERATING ACTIVITY

- IIncrease in the trade and other payables 493.3 to 3016.2 i.e 500%.

- I Unrealized foreign exchange gain from 136 to 1516 i.e 1000%.

INVESTING ACTIVITY

- I Purchase of investments from 175 to 270 i.e 55%.

- I Purchase of fixed deposits

149.

FINANCING ACTIVITY

- I Cash credit facility of Rs. 146.

- I Payment of cash-credit up to 91 and repayment of long-term loan.


15/23

Mar '07 Mar '08 Mar '09





Net Cash (used in)/from Financing

Activities 2340.07 2131.29 7639


quivalents 1670.09 -1322.67 1847.37

Opening Cash & Cash Equivalents 149.64 1819.73 497.06


IDEA CELLULAR


16/23

ANALYSIS OF CASH FLOW STATEMENT OF IDEA

CELLULAR:OPERATING ACTIVITY

- ILoss on the sale of fixed assets i.e 15.12.

- I Increase in depreciation from 756-1472 i.e 94.7%.

INVESTING ACTIVITY

- I Purchase of fixed assets and intangible assets.

- IPayment for the purchase of shares of Spice Communications Ltd.

FINANCING ACTIVITY

- I Proceeds from short-term borrowings from 221 to 449 i.e 100%.

- I Convertible Preference shares issue.


17/23

Executive Summary


18/23

Interfirm Comparison

2008-09Ratios Airtel Idea Reliance

Current Ratio 0.69 0.98 1.45

NP Margin (%) 22.58 9.91 30.47

Debt Equity

0.28 0.67 0.6ROCE (%)

28.4 11.2 3.01

RONW (%)

28.13 8.87 9.29


19/23

Budget Impact Indirect gain from additional banking licenses

Rate of MAT: 15% to 18%

Good news for 3G Players


20/23

Future Prospects


21/23

Customers

Technologies

Rural Penetrationeg.TATA-Dainik Samachar , Reliance

Grameen Phone (FWP)

3GCustomer

Decrease in CPUS Increase in ARPU

Boost in Device Manufacturers

Opportunities


22/23

Credits Purvi Asher

Ritika Poojari

Kushboo Vora

Sagar Shah

Chitra Bhosle

02

44

60

53

06


23/23

THANK YOU

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