FINANCIAL ANALYSIS

OF
BHARTI AIRTEL LTD.

COMPILED BY:
AMAN RAWAT (07304)
BHAVIK VYAS (07311)
IPSHITA VERMA (07325)
HARDIK MARFATIA (07329)
RADHIKA GUPTA (07346)
VITRAG SHELADIA (07352)
YASHMITA GOEL (07358)

CONTENTS
1. SECTION I

Introduction ........................................................................................................04
Products ............................................................................................................04
Board of Directors .............................................................................................05
Worldwide Presence .........................................................................................06
Shareholding Pattern ........................................................................................07

2. SECTION II

Peer Comparison .............................................................................................09

3. SECTION III

Ratio Analysis ..................................................................................................13

Trend Analysis .................................................................................................25
Analysis of Cash Flow Statement ....................................................................31

4. SECTION IV

SWOT Analysis ...............................................................................................33

5. ANNEXURES

Consolidated Balance Sheet ..........................................................................35

Consolidated Profit And Loss Account ...........................................................36
Cash Flow Statement .....................................................................................37

2|Page

SECTION I

3|Page

 INTRODUCTION:
Bharti
Airtel
Limited,
commonly
known
as Airtel,
is
an
Indian
multinational telecommunications Service Company headquartered in New Delhi, India. In
1983, Sunil Bharti Mittal founded the Bharti Group. It operates in 20 countries across South
Asia, Africa, and the Channel Islands. Airtel has GSM network in all countries in which it
operates, providing 2G, 3G and 4G services depending upon the country of operation. Airtel
is the world's fourth largest mobile telecommunications company by subscribers with over
275 million subscribers across 20 countries as of July 2013. It is the largest cellular service
provider in India, with 191.39 million subscribers as of July 2013.
Airtel is the largest provider of mobile telephony and second largest provider of fixed
telephony in India, and is also a provider of broadband and subscription television services.
It offers its telecom services under the Airtel brand, and is headed by Sunil Bharti Mittal.
Bharti Airtel is the first Indian telecom service provider to achieve Cisco Gold Certification. It
also acts as a carrier for national and international long distance communication services.
The company has a submarine cable landing station at Chennai, which connects the
submarine cable connecting Chennai and Singapore.
Airtel launched "Hello Tunes", a Caller ring back tone service (CRBT), in July 2004
becoming to the first operator in India to do so. The Airtel theme song, composed by A.R.
Rahman, was the most popular tune on that year.
On 26 February 2013, Airtel announced that it had deployed Ericssons Mobile Broadband
Charging (MBC) solution and completely modernized its prepaid services for its subscribers
in India. As a part of the deal, Ericssons multi service MBC suite allows prepaid customers
to have personalized profile based data charging plans. Prepaid customers will be able to
customize their data plans across mobility, fixed line and broadband by cross bundling
across multiple domains (2G, 3G, 4G/LTE & Wi-Fi). It will also offer flexible multi service
charging in geographical redundant mode, making Airtel the first operator to implement
geographical redundancy at such a large scale.

PRODUCTS:
1. Fixed line and mobile telephony
2. Broadband and fixed-line internet services
3. Digital television
4. IPTV

4|Page

 BOARD OF DIRECTORS:
Executive Chairman

Sunil Bharti Mittal

Director

Ajay Lal
Chua Sock Koong
Pulak Chandan Prasad
Rajan Bharti Mittal

Managing Director

Manoj Kohli

Director

Nikesh Arora
Craig Edward Ehrlich
Tan Yong Choo
Tsun Yan Hsieh

Company Secretary

Mukesh Bhavnani

Additional Director

Manish Kejriwal
Obiageli Oby Ezekwesili

Additional Director & JMD Gopal Vittal

5|Page

 WORLDWIDE PRESENCE:
a. The Indian Subcontinent:

Airtel Bangladesh, in Bangladesh

Airtel, in India
Airtel Sri Lanka, in Sri Lanka

b. Airtel Africa, which operates in 17 African countries:

Burkina Faso, Chad, Democratic Republic of the Congo, Republic of the

Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Rwanda,
Seychelles, Sierra Leone, Tanzania, Uganda and Zambia.

6|Page

 SHAREHOLDING PATTERN:
Shareholding pattern of a company shows how its shares are split among the entities that
make up its owners.
Shareholding pattern of Bharti Airtel is as follows:

Particulars
Promoter Holding
Indian Promoters
Foreign Promoters
Non-Promoter holdings (Other than
Public)
Financial Institutions/Banks
FII/Foreign Fin Inst/Foreign Banks
Corporate Bodies
Government Holdings
OCB
NRI
Mutual Funds
Other Foreign Holdings
General Public
Individual Holding Upto Rs. 1 lakh
Individual Holding Excess of Rs. 1 lakh
Others
Total

No. of
Shares

Percent share
(%)

1735453890
865673286

45.7
22.8

166287643
665436317
154418700
0
5082710
55
144077538
3366737

4.38
17.52
4.07
0
0.13
0
3.79
0.09

41017834
10783182
5932204
3797530096

1.08
0.28
0.16
100

Shareholding Pattern (%)

Promoter Holding
Indian Promoters
Foreign Promoters
Non-Promoter holdings
(Other than Public)
Financial
Institutions/Banks
FII/Foreign Fin
Inst/Foreign Banks

7|Page

SECTION II

8|Page

OPERATING PERFORMANCE
I.

PEER COMPARISON:
Peer comparison is an investment rating used by analysts when given security is expected to
provide returns that are consistent with those of other companies within its sector.
We will be comparing Bharti Airtel with its Peers Idea Cellular, Reliance communication,
Tele Communication and MTNL.

COMPETITION
Name
Bharti Airtel
Idea Cellular
Reliance Communication
Tata Communication
MTNL

i.

NSE
Sales
Total
Price
Market Cap (Rs Crore) Turnover
Net Profit assets
313.75
125418.43
45350.90
5096.30 67126.00
158.10
52437.29
22036.87
818.26 23072.72
139.50
28793.17
11267.00
624.00 73068.00
161.70
4608.45
4416.12
475.24 8087.80
10.75
677.25
3428.66
-5321.12 12184.20

On The Basis Of NSE Price:

Comparing on the basis of NSE Price, Bharti Airtel is highest priced, MTNL being the
cheapest.

NSE Price
350.00
300.00
250.00
200.00
150.00
100.00
50.00
0.00

NSE Price

9|Page

ii.

On The Basis Of Market Capture:

Comparing on the basis of Market Capture, we can see that Bharti Airtel has the largest
market share, whereas the peers are nowhere close to it.

Market Cap (Rs Crore)

140000.00
120000.00
100000.00
80000.00
60000.00
40000.00
20000.00
0.00

iii.

Market Cap (Rs Crore)

On The Basis Of Sales Turnover:

Comparing on the basis of Sales Turnover, Bharti Airtels turnover of the sales is the highest.

Sales Turnover
50000.00
45000.00
40000.00
35000.00
30000.00
25000.00
20000.00
15000.00
10000.00
5000.00
0.00

Sales Turnover

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iv.

On The Basis Of Net Profit:

Comparing on the basis of Net Profit, we observe that Bharti Airtels Net Profit is the highest,
while its peers Net Profit is a few thousands, MTNLs being in negative.

Net Profit
6000.00
4000.00
2000.00
Net Profit

0.00
-2000.00
-4000.00
-6000.00

v.

On The Basis Of Total Assets:

Comparing on the basis of Total Assets, Bharti Airtel is ranked Two, Reliance
Communication being the First and Tata Communication being Fifth.

Total assets
80000.00
70000.00
60000.00
50000.00
40000.00
30000.00
20000.00
10000.00
0.00

Total assets

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SECTION III

12 | P a g e

RATIO ANALYSIS
Ratio Analysis is a tool used by individuals to conduct a quantitative analysis of information in a
company's financial statements. Ratios are calculated from current year numbers and are then
compared to previous years, other companies, the industry, or even the economy to judge the
performance of the company. Ratio analysis is predominately used by proponents of fundamental
analysis.

I.

LIQUIDITY RATIOS:
Liquidity Ratios measure the ability of a company to repay its short-term debts and meet
unexpected cash needs.
Liquidity Ratios
Current Ratio
Quick Ratio
Debtors' Turnover Ratio
Inventory Turnover Ratio

i.

Mar '10 Mar '11 Mar '12 Mar '13

1.06
0.5
0.81
0.54
1.06
0.5
0.81
0.54
15.3
16.97
18.45
20.7
1307.05 1105.11 1296.07 21595.67

CURRENT RATIO:
The Current Ratio measures a company's ability to pay short-term obligations. It
gives an idea of the company's ability to pay back its short-term liabilities
(debt and payables) with its short-term assets (cash, inventory, receivables). The
higher the current ratio, the more capable the company is of paying its obligations.
Ideally it is 2:1.
Bharti Airtel had a healthy Current Ratio in March 2010, but it declined steeply to 0.5
in March 2011 and has been on a lower side since then due to inadequate Working
Capital. This indicates that the firm might not be able to meet its current liabilities.

Current Ratio
1.2
1
0.8
0.6

Current Ratio

0.4
0.2
0
Mar '10

Mar '11

Mar '12

Mar '13

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ii.

QUICK RATIO:
Quick Ratio determines whether a firm has enough short-term assets to cover its
immediate liabilities without selling inventory.
Since Current Ratio and Quick Ratio of Bharti Airtel has been identical, it indicates
that the quantum of inventory is sufficient for the company.

Quick Ratio
1.2
1
0.8
0.6

Quick Ratio

0.4
0.2
0
Mar '10

iii.

Mar '11

Mar '12

Mar '13

DEBTORS TURNOVER RATIO:

Debtors Turnover Ratio signifies how fast the debtors can be converted into
equivalent cash.
This ratio for Bharti Airtel has been increasing which means that the company has
been able to convert debtors into cash at a faster rate each year, which leads to an
increase in cash balance which the company can use for its day to day operations.

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Debtors' Turnover Ratio

25
20
15
Debtors' Turnover
Ratio

10
5
0
Mar '10

iv.

Mar '11

Mar '12

Mar '13

INVENTORY TURNOVER RATIO:

Inventory Turnover Ratio shows that how many times in a year, a companys inventory
changes.
This ratio has been moreover a constant one from March 2010 to March 2012 but
increased steeply in March 2013 indicating that the sales of Bharti Airtel have been
increasing.

Inventory Turnover Ratio

25000
20000
15000
Inventory Turnover
Ratio

10000
5000
0
Mar '10

Mar '11

Mar '12

Mar '13

15 | P a g e

II.

PROFITABILITY RATIO:
Profitability ratios measure a company's operating efficiency, including its ability to generate
income and therefore, cash flow. Cash flow affects the company's ability to obtain debt and
equity financing.

Profitability Ratios
Net Profit Margin
Operating Profit Margin
Return On Equity
Return On Capital Employed

i.

Mar '10 Mar '11 Mar '12 Mar '13

26.47
20.3
13.77
11.24
39.08
35.25
32.98
29.7
29.42
19.2
12.33
9.9
26.27
18.51
13.97
12.41

NET PROFIT MARGIN:

Net Profit Ratio establishes the relationship between net profit and sales, that is, it
shows the percentage of net profit earned on sales. It is an indicator of overall
efficiency of the business.
It has been on a decline since March 2010 indicating that the companys overall
efficiency has suffered a downfall.

Net Profit Margin

30
25
20
15

Net Profit Margin

10
5
0
Mar '10

Mar '11

Mar '12

Mar '13

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ii.

OPERATING PROFIT MARGIN:

Operating Profit Margin measures the operational efficiency of a firm.
It has also been decreasing which again means that the companys earnings have
been declining.

Operating Profit Margin

45
40
35
30
25
20
15
10
5
0

Operating Profit
Margin

Mar '10

iii.

Mar '11

Mar '12

Mar '13

RETURN ON EQUITY:
The amount of net income returned as a percentage of shareholders equity. Return
on equity measures a corporation's profitability by revealing how much profit a
company generates with the money shareholders have invested.
It has been decreasing since March 2010 indicating that Bharti Airtel has not
generated much profit with the money invested by shareholders.

Return On Equity
35
30
25
20
Return On Equity

15
10
5
0
Mar '10

Mar '11

Mar '12

Mar '13

17 | P a g e

iv.

RETURN ON CAPITAL EMPLOYED:

Return on Capital Employed judges the overall performance of the enterprise, that is,
the efficiency and the profitability.
It has been declining since March 2010.

Return On Capital Employed

30
25
20
15

Return On Capital
Employed

10
5
0
Mar '10

Mar '11

Mar '12

Mar '13

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III.

SOLVENCY RATIO:
The solvency ratio measures the size of a company's after-tax income; excluding non-cash
depreciation expenses, as compared to the firm's total debt obligations. It provides a
measurement of how likely a company will be to continue meeting its debt obligations.

Solvency Ratios
Debt Equity Ratio
Debt To Total Asset Ratio
Interest Coverage

i.

Mar '10 Mar '11 Mar '12 Mar '13

0.14
0.27
0.29
0.24
0.08
0.14
0.13
0.15
-17.84
27.92
5.98
4.91

DEBT EQUITY RATIO:

A measure of a company's financial leverage calculated by dividing its total
liabilities by stockholders' equity. It indicates what proportion of equity and debt the
company is using to finance its assets.
Debt Equity Ratio of Bharti Airtel initially increased from March 2010 to March 2012,
but gradually decreased in March 2013. The gradual decline in debt/equity ratio
shows that the company is less dependent on debt for its financing activities.

Debt Equity Ratio

0.35
0.3
0.25
0.2
Debt Equity Ratio

0.15
0.1
0.05
0
Mar '10

Mar '11

Mar '12

Mar '13

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ii.

DEBT TO TOTAL ASSET RATIO:

A Debt to Total Asset Ratio is a measurement representing the percentage of a
corporation's assets that are financed with loans and financial obligations lasting
more than one year.
It has been increasing since March 2010 indicating that the percentage of Bharti
Airtels assets that are financed with loans and financial obligations lasting more than
one year has increased.

Debt To Total Asset Ratio

0.16
0.14
0.12
0.10
0.08

Debt To Total Asset

Ratio

0.06
0.04
0.02
0.00
Mar '10

iii.

Mar '11

Mar '12

Mar '13

INTEREST COVERAGE:

Interest Coverage Ratio shows how efficiently a company can pay off its interest
expenses over and above the principle amount.
In March 2011, it was the highest of these four years but again declined in the
consecutive years indicating the companys ability to pay off its interest expenses has
decreased.

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Interest Coverage
40
30
20
10
Interest Coverage
0
Mar '10

Mar '11

Mar '12

Mar '13

-10
-20
-30

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IV.

CAPITAL MARKET RATIOS:

Capital Market Ratios
Earnings Per Share
Earnings Yield
Dividend Yield
Price Earning Ratio

i.

Mar '10 Mar '11 Mar '12 Mar '13

24.82
20.32
15.09
13.42
0.08
0.06
0.04
0.05
0
0
0
0
12.57
17.59
22.32
21.74

EARNINGS PER SHARE:

Earnings Per Share is portion of a company's profit allocated to each outstanding
share of common stock. Earnings per share serve as an indicator of a company's
profitability.
Bharti Airtels earnings per share have shown a decline since March 2010 indicating
that its profitability has decreased.

Earning Per Share

30
25
20
15

Earning Per Share

10
5
0
Mar '10

Mar '11

Mar '12

Mar '13

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ii.

EARNINGS YIELD RATIO:

The Earnings Yield shows the percentage of each unit of money invested in the stock
that was earned by the company.
It has been on a decline since March 2010, but shown a slight increase in March
2013.

Earnings Yield
0.09
0.08
0.07
0.06
0.05
Earnings Yield

0.04
0.03
0.02
0.01
0.00
Mar '10

iii.

Mar '11

Mar '12

Mar '13

DIVIDEND YIELD RATIO:

Dividend Yield Ratio is a financial ratio that shows how much a company pays out in
dividends each year relative to its share price.
It has been constant at 0 since March 2010 as dividend per share was 0.

23 | P a g e

Dividend Yield
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0

Dividend Yield

Mar '10

iv.

Mar '11

Mar '12

Mar '13

PRICE EARNING RATIO:

Price Earning Ratio conveys the number of times market is willing to pay to buy a
firm compared to its current net profits. If a firm has a bright future compared to its
present performance then it would have a high P/E ratio.
In case of Bharti Airtel, this ratio has been increasing from March 2010 to March
2012 but showed a slight decline in March 2013. Nonetheless, according to the price
earning ratio we can say Bharti Airtel has a strong position in the market.

Price Earning Ratio

25
20
15
Price Earning Ratio

10
5
0
Mar '10

Mar '11

Mar '12

Mar '13

24 | P a g e

TREND ANALYSIS
Trend analysis is important in the business and financial sectors. Trend analysis is often used to
make projections and assessments of financial health. Financial analysts examine the past
performance of their company, along with current financial conditions, to determine how their
company will perform in the future.
Trend analysis is one of the tools for the analysis of the companys monetary statements for the
investment purposes. In a trend analysis, the financial statements of the company are compared
with each other for the several years after converting them in the percentage.

25 | P a g e

 BALANCE SHEET
LIABILITIES
Shareholder's Funds
Share Capital
Share Warrants & Outstandings
Total Reserves
Shareholder's Funds
Long-Term Borrowings
Secured Loans
Unsecured Loans
Deferred Tax Assets / Liabilities
Other Long Term Liabilities
Long Term Provisions
Total Non-Current Liabilities
Current Liabilities
Trade Payables
Other Current Liabilities
Short Term Borrowings
Short Term Provisions
Total Current Liabilities
Total Liabilities
ASSETS
Non-Current Assets
Gross Block
Less: Accumulated Depreciation
Net Block
Capital Work in Progress
Intangible assets under development
Non Current Investments
Long Term Loans & Advances
Other Non Current Assets
Total Non-Current Assets
Current Assets Loans & Advances
Currents Investments
Inventories
Sundry Debtors
Cash and Bank
Other Current Assets
Short Term Loans and Advances
Total Current Assets
Net Current Assets (Including Current Investments)
Total Current Assets Excluding Current Investments
Total Assets

Mar-10

Mar-11

Mar-12

Mar-13

100
100
100
100

100.00
149.70
121.01
120.07

100.00
157.50
136.32
134.55

100.00
152.66
149.96
147.39

100
100
100
0
0
100

43.40
149.05
15987.88
100.00
100.00
210.42

7.36
164.63
25354.55
100.21
140.22
232.62

5.08
196.80
34857.58
126.17
149.10
283.83

100
100
0
100
100
100

63.71
191.31
100.00
128.17
131.51
131.13

57.96
182.21
213.27
154.81
152.48
148.20

65.99
136.21
113.55
180.60
161.85
163.26

Mar-10

Mar-11

Mar-12

Mar-13

100
100
100
100
0
100
0
0
100

138.96
128.10
145.23
89.80
100.00
104.94
100.00
100.00
162.54

151.33
163.50
144.30
57.88
70.21
105.83
119.78
357.11
162.57

172.36
204.01
154.09
64.64
0.00
243.14
126.19
461.29
200.33

100
100
100
100
100
100
100
100
100
100

2.34
126.47
69.45
16.31
1546.23
80.66
62.46
-1148.19
82.26
131.13

11.55
118.01
101.40
58.92
1584.34
159.28
116.76
-509.59
151.42
148.20

23.38
7.72
106.74
44.41
1654.97
95.69
82.20
-1314.30
101.58
163.26
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 PROFIT & LOSS ACCOUNT

Particulars

Mar-10

Mar-11

Mar-12

Mar-13

INCOME:
Gross Sales

100

106.76

116.83

127.36

Less :Inter divisional transfers

Less: Sales Returns

Less: Excise

Net Sales

100

106.76

116.83

127.36

Other Income

100

129.87

165.57

387.78

Total Income

100

107.01

117.34

130.09

Increase/Decrease in Stock

100

48.98

-15.65

-204.08

Raw Materials Consumed

100

66.57

45.71

-80.29

Power & Fuel Cost

100

111.40

131.25

157.61

Employee Cost

100

96.71

92.73

100.72

Other Manufacturing Expenses

100

111.21

128.87

149.68

General and Administration Expenses

100

117.34

131.76

146.64

Selling and Distribution Expenses

100

136.84

139.68

155.00

Miscellaneous Expenses

100

100.92

117.14

107.14

0.00

0.00

0.00

Total Expenditure

100

113.71

127.96

145.90

Operating Profit (PBDIT)

100

96.64

100.94

105.65

Interest

100

-57.06

-245.81

-290.90

PBDT

100

90.71

87.54

90.33

Depreciation

100

115.16

147.73

170.48

Profit Before Taxation & Exceptional Items

100

81.55

65.02

60.33

0.00

0.00

0.00

PBT

100

81.55

65.02

60.33

Provision for Tax

100

79.25

96.32

106.71

PAT

100

81.87

60.79

54.07

0.00

0.00

0.00

100

144.73

180.96

207.23

EXPENDITURE :

Expenses Capitalised

Exceptional Income / Expenses

Adjustment to Profit After Tax

Profit Balance B/F

27 | P a g e

I.

INCOME-EXPENDITURE ANALYSIS:
500000
450000
400000
350000
300000
250000
200000
150000
100000
50000
0

Total Income
Total Expenditure
Operating Profit (PBDIT)

As we can see in the above figure, there has been a continuous increase in Total Income of Bharti
Airtel. It has increased from 36,693.09 Crore in March 2010 to 46,784.00 Crore in March 2013.
Total Expenses have also increased from 21,608.29 Crore in March 2010 to 31,850.20 Crore in
March 2013. The difference between the two, that is, the Operating Profit has been near about
consistent over the years.
The Rate of increase in revenue and expenditure has been shown below:
450
400
350
300

Other Income

250
Total Expenditure

200
150

Operating Profit
(PBDIT)

100
50
0
-10

-11

-12

-13

Both Total Income and Total Expenses have been increasing over the years, but the rate of
increase in Total Expense is higher than that of rate of increase in Total Income. Sales Turnover
and Net Sales have driven the increase in Total Income and continuously high increase in
Miscellaneous Expenses along with introduction of Power and Fuel Cost has contributed to increase
in Total Expenses.

28 | P a g e

II.

PROFIT ANALYSIS:

100
90
80
70
60

PBT

50

PAT

40
30
20
10
0
-10

-11

-12

-13

Both Profit Before Tax (PBT) and Profit After Tax (PAT) have been declining at a same rate over the
years. PBT has declined from 10,703.53 Crores to 6,454.80 Crores whereas PAT has declined
from 9,426.15 Crores to 5,096.30 Crores.

III.

EARNINGS PER SHARE AND DIVIDEND PER SHARE:

120
100
80
EPS

60

DPS
40
20
0
Mar '10

Mar '11

Mar '12

Mar '13

Earnings Per Share (EPS) has been falling continuously, though Dividend Per Share (DPS) has
been constant over the years, the company has made efforts to maintain the Dividend paid despite
the fall in EPS. The fall in EPS cannot be accounted to increase in number of shares as the shares
in issue have not changed, but can be a result of the falling profit balance.
29 | P a g e

IV.

EQUITY-DEBT ANALYSIS:

600000
500000
400000

Shareholder's Funds

300000

Long Term Debt

200000
100000
0
Mar-10

Mar-11

Mar-12

Mar-13

Bharti Airtel has raised the major portion of funds through Shareholders Fund. The value of
Shareholders Fund has been increasing over the years at a tremendous rate ranging from 100 to
150%. The above graph indicates Bharti Airtels heavy dependence on Shareholders Fund.

V.

LONG TERM LOAN AND INVESTMENT ANALYSIS:

300
250
200
150

Long Term Debt

100

Investments

50
0
Mar' 10

Mar' 11

Mar' 12

Mar' 13

Loans and Investments have been increasing over the years, but the increase in Investments was
at more than 350%+ rate.

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ANALYSIS OF CASH FLOW STATEMENT

Cash Flow from Operating Activities
Net cash flow from operating activities is positive which is good for the company. Company
has generated income of 138847 Millions from operating activities which it can use in
other activities. This means it has good financial flexibility and has a backup if it needs cash.
It has the capacity to meet its daily operating expenses with ease. Increase in Inventories
and increase in Trade and other payables accounts for cash generated from operating
activities.

Cash Flow from Investing Activities

Bharti Airtel is purchasing fixed tangible and intangible assets which may be due to the fact
that the company is expanding. This analysis can be supported by the fact that the company
has received interest as well as provided loan to its subsidiaries. Also, it has received
dividend from the subsidiary companies and has net movement of advances into the
subsidiaries. A large amount is spent on acquisition/subscription/investment in
subsidiaries/associate/joint venture.

Cash Flow from Financing Activities

The major components of financing activities are receipts from borrowings and repayment of
borrowings. Since the company is highly dependent on equity, so it is important that it
maintains good dividend payment policies and it can be seen that it is doing so. Moreover it
has also been consistent in interest and other finance charges payment.

31 | P a g e

SECTION IV

32 | P a g e

SWOT ANALYSIS
SWOT Analysis is a structured planning method used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats involved in a project or in a business venture. A SWOT analysis can be
carried out for a product, place, industry or person. It involves specifying the objective of the
business venture or project and identifying the internal and external factors that are favourable and
unfavourable to achieving that objective.

STRENGTHS
1.
2.
3.
4.
5.

Present in more than 20 countries.

An integrated telecom company with complete tele-media solutions.
Present in the country with second largest population globally.
Largest operator in India and fourth largest in the world.
Technology, infrastructure and skilled manpower.

WEAKNESSES
1. High degree of financial leverage.
2. Inadequate infrastructure in rural regions pushing cost of operations.
3. Integration in operations across continents.
4. Understanding evolving customer perceptions in a multi-cultural and multi-lingual
environment.

33 | P a g e

 OPPORTUNITIES
1.
2.
3.
4.

Untapped telecom market in Africa and rural India.

Underpenetrated broadband connectivity.
Mandatory digitisation of cable television across the country.
Increasing data consumption over voice consumption.

THREATS
1.
2.
3.
4.
5.

Falling Average Revenue per User.

Political and economic uncertainties in Africa and India.
Cost inflation across countries.
Continued regulatory stringency.
Increasing competition and competitive pricing.

34 | P a g e

ANNEXURES
I.

CONSOLIDATED BALANCE SHEET

LIABILITIES
Shareholder's Funds
Share Capital
Share Warrants & Outstanding
Total Reserves
Shareholder's Funds
Long-Term Borrowings
Secured Loans
Unsecured Loans
Deferred Tax Assets / Liabilities
Other Long Term Liabilities
Long Term Provisions
Total Non-Current Liabilities
Current Liabilities
Trade Payables
Other Current Liabilities
Short Term Borrowings
Short Term Provisions
Total Current Liabilities
Total Liabilities

Mar-10

ASSETS
Non-Current Assets
Gross Block
Less: Accumulated Depreciation
Net Block
Capital Work in Progress
Intangible assets under development
Non Current Investments
Long Term Loans & Advances
Other Non Current Assets
Total Non-Current Assets
Current Assets Loans & Advances
Currents Investments
Inventories
Sundry Debtors
Cash and Bank
Other Current Assets
Short Term Loans and Advances
Total Current Assets
Net Current Assets (Including Current Investments)
Total Current Assets Excluding Current Investments
Total Assets

Mar-10

Mar-11

Mar-12

(Rs. In Millions)
Mar-13

18988
1861
346523
367372

18988
2786
419342
441116

18988
2931
472377
494296

18988
2841
519633
541462

394
49995
33
0
0
50422

171
74516
5276
25132
1002
106097

29
82309
8367
25184
1405
117294

20
98388
11503
31708
1494
143113

77844
45004
0
53531
176379
594173

49598
86097
27644
68611
231950
779163

45121
82000
58956
82874
268951
880541

51372
106034
31390
96677
285473
970048

Mar-11

Mar-12

Mar-13

442125
161875
280250
15947
0
111537
0
0
407734

614374
207367
407007
14320
50472
117051
70812
3059
662721

669068
264660
404408
9230
35435
118041
84817
10924
662855

762061
330235
431826
10308
0
271191
89358
14111
816794

46196
272
21050
8167
664
110090
186439
10060
140243
594173

1079
344
14619
1332
10267
88801
116442
-115508
115363
779163

5337
321
21345
4812
10520
175351
217686
-51265
212349
880541

10800
21
22468
3627
10989
105349
153254
-132219
142454
970048
35 | P a g e

II.

CONSOLIDATED PROFIT & LOSS ACCOUNT

(Rs. In Millions)

Particulars

Mar-10

Mar-11

Mar-12

Mar-13

INCOME:
Gross Sales

356095

380177

416038

453509

Less :Inter divisional transfers

Less: Sales Returns

Less: Excise

356095

380177

416038

453509

Other Income

3773

4900

6247

14631

Total Income

359868

385077

422285

468140

Increase/Decrease in Stock

-147

-72

23

300

Raw Materials Consumed

350

233

160

-281

22650

25233

29727

35699

Employee Cost

15005.5

14512

13915

15113

Other Manufacturing Expenses

110418

122800

142300

165271

General and Administration Expenses

43310.5

50821

57067

63511

21613

29576

30189

33500

5310

5359

6220

5689

Total Expenditure

218510

248462

279601

318802

Operating Profit (PBDIT)

141358

136615

142684

149338

-5680

3241

13962

16523

147038

133374

128722

132815

40045

46116

59160

68267

106993

87258

69562

64548

106993

87258

69562

64548

Provision for Tax

12731

10089

12262

13585

PAT

94262

77169

57300

50963

185028

267785

334820

383438

Net Sales

EXPENDITURE :

Power & Fuel Cost

Selling and Distribution Expenses

Miscellaneous Expenses
Expenses Capitalised

Interest
PBDT
Depreciation
Profit Before Taxation & Exceptional Items
Exceptional Income / Expenses
PBT

Adj to Profit After Tax

Profit Balance B/F

36 | P a g e

III.

CASH FLOW STATEMENT

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