WARCHEST

RELIANCE JIO

Eshan Gupta(PGP16006)
Gautam Majumdar(PGP16007)
Abhishek Anant(PGP16087)
Vipul Gupta(PGP16159)
Sahil Sharma(PGP16182)
Vivek Bhanushali(PGP16190)
Contents
1.1 Industry Analysis:...................................................................................................................................2
1.2 Growth Drivers, Growth Inhibitors and Sector Risk factors...................................................................3
Growth Drivers of Telecommunication Industry.....................................................................................3
Growth Inhibitors in Telecommunication Industry..................................................................................7
1.3 Macroeconomic factors affecting the telecom Industry........................................................................9
1.4 Performance Metrics of the Industry:.................................................................................................10
Average Return Per User (ARPU)...........................................................................................................10
1.5 Recent Developments:........................................................................................................................13
1.6 Policies for the Telecom Industry and its effects.................................................................................15
1.7 Cost Heads for Telecom Sector............................................................................................................18
1.8 Major Players in the telecom industry.................................................................................................19
1.9 Growth Strategy..................................................................................................................................19
1.10 Some Key Financial details of the industry:.......................................................................................21
2.0 References...........................................................................................................................................25
1.1 Industry Analysis:

Presently India is world's second largest in telecommunication market and it is growing at a

very fast pace. According to a report prepared by GSM association (GSMA) and Boston
Consulting group (BCG), Indian mobile economy will contribute substantially.

Indian government's liberal and reformist policies along with strong consumer demand has lead
to a rapid growth in the Indian telecom sector. Easy market accessibility and affordability in
prices has ensured availability of telecom services to consumer at an affordable price. The
deregulation of Foreign Direct Investment (FDI) norms has made the sector one of the top
growing and among top five employment opportunity generator in the country.

Indian telecom sector is set to generate 4 million direct and indirect jobs over the next 5 years.
This increase will also lead to the deeper penetration in the rural area.

International Data Corporation (IDC) estimates India will overtake US as the second-largest
smartphone market globally by 2017 and will maintain high growth rate over the next few years
as more and more people will switch to smartphones and will gradually upgrade to 4G.

According to IDC, India is expected a revenue of about US$ 37 billion in 2017, registering a
Compound Annual Growth Rate (CAGR) of 5.2 per cent between 2014 and 2017.

By 2019, India is expected to have over 180 million smartphone users thus contributing 13.5
percent of the global smartphone market.

According to the Ericsson Mobility Report India, smartphone subscriptions in India is expected
to increase four-times to 810 million users by 2021, while the total smartphone traffic is
expected to grow seventeen-fold to 4.2 Exabyte’s (EB) per month by 2021.

According to a study by GSMA, smartphones are expected to account for sixty six percent of
mobile connections globally by 2020 making India the fourth largest smartphone market. Total
number of smartphone (4G) shipments in India stood at 13.9 million units in the quarter ending
December 2015, which was more than 50 per cent of total shipments, thereby surpassing
number of 3G smartphone shipments for the first time. Broadband services user-base in India is
expected to grow to 0.25 billion connections by 2017.

There has been a lot of investment in thus sector. This sector has extracted FDI worth 18.4
billion dollar between April 2000 ad March 2016.

Various projects have been implemented during this period which has tremendously increased
the scope of this sector. Some of the global players which have entered during this period are
Singapore Telecommunications Limited (Singtel), Gionee, Axiata Digital, Sistema Shyam
TeleServices Ltd (SSTL).

Government has also been very instrumental behind the success of this industry. Some of the
key initiatives taken by the Government of India are launching Twitter sewa (an online
communications platform used for registering and resolving of user complaints in the
telecommunications and postal sectors), unifying license for telecom operations which will
allow sharing of active telecom infrastructure like antenna and feeder cable between operators,
thereby lower the costs of operations and leading to faster rollout of networks.

India will emerge as a leading player in the virtual world by having 0.7 billion internet users of
the 4.7 billion global users by 2025, as per a Microsoft report. With the government’s
favourable rules and 4G services hitting the market, the Indian telecommunication sector is
expected to experience fast growth in the next few years.

1.2 Growth Drivers, Growth Inhibitors and Sector Risk factors

Growth Drivers of Telecommunication Industry

The telecommunication industry is rapidly evolving by the virtue of technology and innovation.
It is also an industry that is very dynamic in itself. This presents the market players with both
the opportunity to expand their business and at the same time competition also becomes stiff.

Following are the few growth drivers of the telecom industry:

1. Mobile devices and related broadband connectivity

The number of “connected things” continues to grow as mobile and “smart” device
utilization and connectivity continues to expand and which ultimately results in shaping
up the future. As the number of these embedded devices that require mobile
connectivity grows, telecom companies will be looking forward for opportunities to
increase their revenues with the help of their core business like network connectivity,
sale of network equipment and devices, all of which this emerging ecosystem will
require, as well as through new products and services that are enabled by these core
businesses.  

All India Mobile Subscriber base

 Source: CRISIL Research, Telecom Regulatory Authority of India.

2. M Payments

It is the next wave of growth in the telecom industry. Accelerating growth is expected in
the value and volume of mobile payments transactions globally, with non-banks
accounting for a rising share. The universe of mobile payments services is expanding
rapidly, marketing and shopping services delivered via mobile and more or less
disrupting the existing market. Around the world, support from governments and
central banks has provided the base for scalable mobile money transfer services.
3. Internet of Things

The consumer oriented goods like smart watches and other wearables, smartphones,
cars are comprise of Internet of things in short IoT Telecommunications companies will
also find IOT as technology which will provide new opportunities for growth in the
public sector for them as “smart cities” gains a lot of traction in India. Consumer
demand for digital technologies like connected city lighting, asset monitoring and
 tracking, and video security that will make their life’s more secure and easy would make
telecom companies interested. For telecom companies looking to grab this opportunity
will definitely integrate with other key industries like retail, automobile or healthcare in
order to increase their capabilities and satisfy customer.

4. LTE, the all IP-Network & the inexorable Big Data

In present times the usage of internet data has been increased dramatically, particularly
due to video streaming services, and is expected to continue growing in future as well.
Wi-Fi usage will continue to be the key, especially as operators are looking to transfer
the traffic onto broadband networks (especially fibre) and at the same time develop
other spectrum efficient technologies and potentially unlicensed spectrum solutions
(i.e., LTE-U). Voice over LTE (VOLTE) and Voice over Wi-Fi (VoWiFi) services will also are
key areas to focus in order to rationalize networks and offer improved and efficient
services.

5. Government Initiatives       
 The government has fast-tracked reforms in the telecom sector and continues to be
proactive in providing room for growth for telecom companies. Some of the other major
initiatives taken by the government are as follows:
 The Ministry of Communications & Information Technology has launched Twitter
Sewa, an online communications platform for registration and resolution of user
complaints in the telecommunications and postal sectors.
 The Telecom Regulatory Authority of India (TRAI) has released a consultation
paper which aims to offer consumers free Internet services within the net
neutrality framework and has proposed three models for free data delivery to
customers without violating the regulations.
 The Government of India has liberalised the payment terms for spectrum
auctions by allowing two options of payments to telecom companies for
acquiring the right to use spectrum, which include upfront payment and
payment in instalments.
 The Department of Telecommunications (DoT) has amended the Unified Licence
for telecom operations which will allow sharing of active telecom infrastructure
like antenna, feeder cable and transmission systems between operators, thereby
lowering the costs of operations and leading to faster rollout of networks.

Growth Inhibitors in Telecommunication Industry

1. Falling ARPU affecting profit margins:

The Indian telecom industry is currently facing a lot of financial challenges and the
most pronounced one is the rising debt is a rising concern. In FY14, the total
industries debt was around INR2,500 billion — higher than the industry’s gross
revenue of INR2,338.5 billion. In addition to financial leveraging, multiple tax and
levies have added the worries for the telecom companies in India. And at the same
time high price related competition in the market also led to low ARPU and hence
putting pressure on the profit margins.
2. Increasing debt/equity ratio

Telecom Company’s consolidation and the race to horde spectrum would results in
debt trap. The merger of companies and spectrum trading activity on the outset of
4G will increase the debt in the industry. And at the same time the entry of players
like Reliance Jio will ensure that the tariff will not increase. All these means
contribute to increase the expenditure manifold and hence results in debt.

3. Rural penetration
 The telecom urban market in India is almost saturated. So the capture of rural
market will be the key with regards to the growth strategy. There is a huge growth
potential of this rural segment as under 25 % of base has been covered. One of the
major reasons is the high cost of maintenance of the network at these places. So the
challenge in front of the operators would be to look for cost effective ways and
efficient technology in order to reduce the infrastructure cost.

4. Government regulations

Some government regulations also act as a growth inhibitor for telecom industry. The
regulations like denial of procuring equipment’s from Chinese manufactures and the
existing operators who have extra spectrum would need to pay extra spectrum charges
at the 3G rates would acts as a obstruction in the growth path of the industry. And at
the same time the home ministry has issued instructions to all the companies that they
should ensure proper address and identity proof for their entire subscriber particularly
in the case of prepaid. The government feels that all these provisions will enhance the
security layer but in a certain way these provision also hinders the growth of the
industry.

1.3 Macroeconomic factors affecting the telecom Industry

Advancement in technology is one important factor for the revenues of the telecom industry in
the western-countries. Today, however, new wireless applications and low-cost manufacturing
innovations are few areas in which the Asian countries are investing out of the United States
and are seen resulting bottom-line impacts to their economies (National Research Council,
2006). In emerging markets, factors such as customer service, rules and regulation are some of
the main factors that are shaping the industry.

Customer service is one of the factors that influences the revenue growth of the telecom
industry.

The telecommunications policy in countries like the United States of America is a framework of
law directed by government and the regulatory commissions, most notable among them is the
Federal Communications Commission (FCC). One of the most important goals of the FCC is to
best utilize this limited resource, in such a way that it brings the "highest and best use"
(Wikipedia, 2003).The Government of India aims to develop the nation as a global
telecommunication hub and provides regulatory support to the industry to achieve the goal and
to propose ‘Infrastructure’ status to telecom (IBEF, 2011).

1.4 Performance Metrics of the Industry:

Average Return Per User (ARPU)

This metric is important in the telecommunications industry, as it illustrates the company's

operational performance. The ability to maximize profits and minimize costs associated with
servicing each end user is key to these companies. Because telecommunications companies are
service providers instead of manufacturers of a product, investors want to measure marginal
profit and cost on a unit level, revealing how well the company utilizes its resources. The higher
the average return, the better. Generally, telecommunications companies that offer bundling
services enjoy a higher ARPU.

Source
Source

Source

Source

Churn

This metric measures the number of subscribers who leave and is often reported quarterly.
Obviously, a low churn rate is ideal. Companies that experience a high churn rate are under
more pressure to generate revenue from other areas or gain new clients.
Source

Subscriber Growth

A telecommunications company's future revenue growth has much to do with its ability to grow
its customer base and add new subscribers. Subscriber growth is, therefore, an extremely
important metric. A steady subscriber growth rate indicates a competitive telecommunications
company that is keeping up with technology trends, thereby keeping customers happy and
attracting new customers.
Source

1.5 Recent Developments:

Major Development in Telecom Industry in India:

Market Size
 Driven by strong adoption of data consumption on handheld devices, the total mobile
services market revenue in India is expected to touch US$ 37 billion in 2017, registering
a Compound Annual Growth Rate (CAGR) of 5.2 per cent between 2014 and 2017,
according to research firm IDC.
 India is expected to have over 180 million smartphones by 2019, contributing around
13.5 per cent to the global smartphone market, based on rising affordability and better
availability of data services among other factors.&
  According to a report by leading research firm Market Research Store, the Indian
telecommunication services market will likely grow by 10.3 per cent year-on-year to
reach US$ 103.9 billion by 2020.
 According to the Ericsson Mobility Report India, smartphone subscriptions in India is
expected to increase four-fold to 810 million users by 2021, while the total smartphone
traffic is expected to grow seventeen-fold to 4.2 Exabytes (EB) per month by 2021.
 According to a study by GSMA, smartphones are expected to account for two out of
every three mobile connections globally by 2020 making India the fourth largest
smartphone market. Total number of Fourth-Generation (4G) enabled smartphone
shipments in India stood at 13.9 million units in the quarter ending December 2015,
which was more than 50 per cent of total shipments, thereby surpassing number of
Third-Generation (3G) enabled smartphone shipments for the first time.^ Broadband
services user-base in India is expected to grow to 250 million connections by 2017.

Investment

With daily increasing subscriber base, there have been a lot of investments and developments
in the sector. The industry has attracted FDI worth US$ 18.38 billion during the period April
2000 to March 2016, according to the data released by Department of Industrial Policy and
Promotion (DIPP).

Some of the major developments in the recent past are:

 LeEco, a Chinese technology company, has entered into a partnership with Compal
Technologies and invested US$ 7 million to set up manufacturing facility at Greater
Noida in order to start manufacturing Le2 smartphones in India.
 Chinese telecom gear maker Huawei has set up its largest global service centre (GSC) at
Bengaluru in India, with an initial investment of Rs 136 crore (US$ 20.28 million), which
will extend its support to Huawei's domestic and international telecom carrier
customers in about 30 markets across Asia, Middle East and Africa.
 Chinese smartphone maker Gionee, which currently assembles smartphones in
partnerships with contract manufacturers Foxconn and Dixon, plans to invest Rs 500
crore (US$ 74.56 million) to set up a manufacturing facility in India.
 Singapore Telecommunications Limited (Singtel), the major shareholder in Bharti Airtel,
announced that it has signed an agreement with its majority owner Temasek Holdings
Private Limited to purchase a 7.39 per cent stake in Bharti Telecom Limited, the parent
company of Bharti Airtel Limited, in a deal worth US$ 659.51 million.
  Axiata Digital, a subsidiary of Malaysia’s largest telecom firm Axiata Group Berhad, has
made its entry into Indian e-commerce market by investing Rs 100 crores (US$ 14.91
million) in Bengaluru-based StoreKing.
 Chinese smartphone manufacturer OnePlus has partnered with Foxconn to start
manufacturing its products in India as part of its plan to have 90 per cent of the devices
sold in India to be locally manufactured by the end of 2017.
 Government of India to make a windfall gain from sale of spectrum in 2016-17 and
achieve its fiscal deficit target of 3.5 per cent of Gross Domestic Product (GDP) for the
year.
 Vodacom SA, a subsidiary of Vodafone Plc, has entered into an agreement with Tata
Communications Ltd to buy the fixed-line assets of TataComm's South African telecom
subsidiary Neotel Pty Ltd.
 Reliance Communications Ltd, India’s fourth largest mobile services provider, has agreed
to acquire Sistema Shyam TeleServices Ltd (SSTL), the local unit of Russian company
Sistema JSFC, in a deal valued at Rs 4,500 crore (US$ 671.01 million), which includes
payments to the government for spectrum allotted to Sistema.
 American Tower Corporation, a New York Stock Exchange-listed mobile infrastructure
firm, has acquired 51 per cent stake in telecom tower company Viom Networks in a deal
worth Rs 7,635 crore (US$ 1.13 billion).
 Swedish telecom equipment maker Ericsson has announced the introduction of a new
radio system in the Indian market, which will provide the necessary infrastructure
required by mobile companies in order to provide Fifth-Generation (5G) services in
future.

1.6 Policies for the Telecom Industry and its effects

 National Telecom Policy, 1994

Through the national telecom policy, the government’s stance shifted from that of self-
reliance to the development of telecom sector. The policy outlined important objectives
like improved quality of service, Availability of a wide range of services at a reasonable
price and creation of a manufacturing base for the telecom equipment. This policy
recognized the importance of private sector to contribute to the growth of telecom
sector in India. The telecom policy also stated that conditions for the entry of private
players in basic telecommunication services needed to evolve. The NTP, 1994 marked
the beginning of the privatisation of the telecom industry in India.
 The Telecom Regulatory Authority of India Act, 1997

The Telecom Regulatory Authority of India Act, 1997 enabled the establishment of the
TRAI. Interestingly, the 1997 Act empowered the TRAI with quasi-judicial authority to
adjudicate upon and settle telecom disputes. Later this Act was amended by the
Telecom Regulatory Authority of India (Amendment) Act, 2000 to bring in better clarity
and distinction between the regulatory and recommendatory functions of TRAI
It gave way to a modified National Telecom Policy of 1999. The Department of Telecom
Services (DTS) was created as a separate department from the DoT in October 1999, for
separating the functions of service provision from policy making. In June 2000, the
Department of Telecom Operations (DTO) was further separated from DTS. In October
2000, DTS was corporatized to form BSNL

 IUC (Interconnect Usage Charges) & CPP (Calling party pays) Regime, 2001 onwards
In 2003, the government implemented the Calling Party Pays Rule -- the mobile
subscriber receiving a call would not have to pay any airtime charges shifting the entire
burden to the calling party. Separately, the IUC regime was implemented in 2003. The
developments ranged from Interconnection Regulation regarding revenue sharing and
recommendations regarding the growth of telecom sector in India over 2001-05.

 UASL Licensing (Fixed & Mobile Services under one License), 2005-08

Unified licence permitted operators to offer any type of service using any technology.
The unified licensing system covered all telecom services including cellular, basic,
infrastructure providers, national and international long distance, internet, VSAT, radio
paging, radio trunking and unified messaging, which earlier fell under DoT's licensing. It
classified the entire area into circles, at the same time providing the norms for the niche
operators, service areas and license fees

 TRAI Regulations & Policies, 2005-10

In November 2008, DOT prohibited the promoters of new telecom companies owning
10% or more stake from selling it for 3 years from the date the licence is issued.
However, the proposal allowed new players to bring in a partner by raising fresh equity
capital. In addition, the reserve prices for 3G and BWA auction were set at a reserve
price of Rs 35 billion, 75% higher than 20 billion earlier. Guidelines were also issued for
the MNP (Mobile Number Portability).
 National telecom Policy, 2012 & FDI, 2010-15

The National Telecom Policy of 2012 aims to unify the licensing, registration, and
regulatory mechanisms for the telecom, broadcast, and information technology
industries. Affordability and availability of effective communication are its key
objectives. In February 2012, the Supreme Court cancelled all 122 2G telecom licences
allotted on or after January 2008, stating there were irregularities in the allotment
process. Operators who secured such licences were compelled to obtain spectrum in
subsequent auctions or wind down operations in the circles. In July 2013, the foreign
direct investment (FDI) ceiling in telecom was increased to 100% from the earlier 74%.
This positive move was followed by Vodafone hiking its stake in its Indian operation to
100% by buying out the existing minority shareholders. The Telecom Commission has
allowed up to 49% FDI through the automatic route, with further investments subject to
approval by the Foreign Investment Promotion Board (FIPB).

 Unified License Regime & New Merger and Acquisitions Norms, 2014-15

The UL regime, issued in August 2013, allows players to offer all telecom services under
one permit. Voice services can be offered on payment of an additional fee. A one-time
non-refundable entry fee to a maximum amount of Rs 150 million will be charged for
authorisation of each service and service area. A uniform licence fee of 8% on adjusted
gross revenue (AGR) has been prescribed across all telecom licences and service areas.
In February 2014, the government issued guidelines with respect to M&As in telecom.
The norms permit only those companies who have either purchased spectrum through
auction or paid one-time spectrum fees to bring old spectrum rates on par with the
latest market-determined price, to participate in M&A activity. There were prescribed
guidelines to be followed in terms of market shares and revenues.

 Spectrum Trading, Spectrum Sharing & Net Neutrality, 2015- Present

In October 2015, the Department of Telecom (DoT) issued guidelines on spectrum

trading. It was notified that, for trading administratively allotted spectrum, market-
determined prices will have to be paid. The buyer was required to pay a non-refundable
1% trading fee to the government on the higher of the transactional amount or the
market-determined price in the last auction. Under spectrum sharing, a specified
amount of spectrum is shared by one operator with another within a licensed service
area for a mutually agreed period at a mutually agreed price. Its main objective is to
provide operators an opportunity to pool their spectrum holdings and gain better
spectral efficiency. The DoT issued spectrum-sharing guidelines in September 2015. In
 February 2016, the Telecom Regulatory Authority of India (TRAI) favoured net neutrality
and ruled out differential pricing of data services. As per differential pricing, an operator
could charge different prices for access to different websites on its network. It may
decrease data usage charges for access to a particular website or application, while
charging more for access to another website. This order will not apply to data which
flows over private networks or closed electronic communications networks. Any
violation would invite a fine of Rs 50,000 per day, subject to maximum Rs 5 million.

 Under recent proceedings, Mobile Virtual Network Operators (MVNO) were given
permission to obtain licenses and offer services of a telecom operator, without actually
owning the spectrum and related infrastructure.
 The government approved a spectrum usage charge of 3% on adjusted gross revenue
(AGR) proposed by the Telecom Commission.

1.7 Cost Heads for Telecom Sector

The competition is intensifying in the telecom space, following the September launch of mobile
services by new operator Reliance Jio Infocomm Ltd, a subsidiary of Reliance Industries. The
higher debt levels following the spectrum auctions and lower profitability from pricing pressure
has resulted in raising industry-wide leverage. These spectrum wins will weigh on balance
sheets and cash flows, as debt levels will rise materially for most operators, including
incumbents Bharti Airtel Ltd., Idea Cellular, Vodafone India etc. Below are listed some of the
significant cost heads for the telecom Industry.1

Regulatory Charges
 License Fees
 Spectrum Charges
 Access Charges

Non-regulatory charges
 Network Operating Cost
 Employee Cost
 Marketing and Brand Promotion Expenses
1.8 Major Players in the telecom industry
Top players in the industry are :

The top player is Airtel followed by Vodafone, But recent entry by Reliance JIO has changed the
industry drastically. Within 3 months of launch they have around 50 -55 million subscribers and
are expected to have 100 millions by march 2017.

1.9 Growth Strategy

The Strategy adopted by Telecom Players are as follows:

Telecommunication industry is in their red phase, they all are working to achieve maximum
market penetration and to achieve that they have to focus on basically three factors

1. Call Drop Rate

2. Internet speed
3. Price which is minimum
As there is large no of players, all of them are still struggling to get the maximum market share
and customer retention is the key here.

With mobile number portability service, switching cost for customer has reduced drastically and
most of the players are almost offering the same service at same price. There is not much
differentiation in terms of price and hence the power of telecom companies is very limited.

Cost Leadership strategy

To have maximum market share and penetration they go for cost leadership strategy as there is
not much of differentiation in their product and service. There is cut throat price war which is
there specially after the entrance of jio, most of the companies have reduced their plans to 80
%.

Fast Service and Speed

The companies are able to differentiate their service only on the basis of speed for which they
have to buy the spectrum, High investment is needed for it. Currently in India we have 4G, most
of the companies are buying band range so that can provide high speed but due to cost
leadership, it is not easy for them to buy, this problem was faced by Vodafone and idea in
current frequency spectrum biding.

Reliance JIO has changed the industry as earlier most of the companies were looking for calls as
their main method of revenue, Reliance has changed the trend by charging only for internet
usage and not for the calls. This has changed the pricing structure of the company and most of
them are looking for the same i.e to stop focusing on call rates and to focus more on data plans

Current spectrum band

 Reliance Jio won 850MHz spectrum 4 circles, 1800 MHz in 8 circles and 2300 MHz
in 16 circles
• Bharti Airtel won 1800 MHz spectrum in 8 circles, 2100 MHz in5 circles and 2300
MHz in 13 circles.
• Idea cellular won 1800 MHz spectrum in 12 circles, 2100 MHz in 4 circles, 2300
MHz in 3 circles and 2500 MHz in 16 circles.
 Vodafone India won 1800 MHz spectrum in 11 circles, 2100 MHz in 7 circles and
2500 MHz
• Reliance communications lost 1800 MHz spectrum in Gujarat and won it in Jammu
& Kashmir.
• Tata Docomo managed to retain its 1800 MHz spectrum in Mumbai, Maharashtra
 and Andhra Pradesh circle.

1.10 Some Key Financial details of the industry:

Mobile Telecommunication

Key Financial Ratios

  Mar '16 Mar '15 Mar '14 Mar '13 Mar '12
Investment Valuation
         
Ratios
Face Value 1 1 1 1 1

Dividend Per Share -- -- -- 0.05 0.06

Operating Profit Per

0.12 0.03 0.12 0.13 0.22
Share (Rs)

Net Operating Profit Per

8.98 13.94 9.4 8.31 14.21
Share (Rs)

Free Reserves Per Share

-- -- -- -- --
(Rs)

Bonus in Equity Capital -- -- -- -- --

Profitability Ratios          

Operating Profit
1.28 0.22 1.25 1.5 1.54
Margin(%)

Profit Before Interest

-0.89 -0.36 0.61 0.78 1.16
And Tax Margin(%)

Gross Profit Margin(%) -0.89 -0.36 0.61 0.79 1.16

Cash Profit Margin(%) 1.1 0.73 0.75 1.42 0.93

Adjusted Cash Margin(%) 1.1 0.73 0.75 1.42 0.93

Net Profit Margin(%) -1.07 0.15 0.12 0.71 0.49

Adjusted Net Profit

-1.07 0.15 0.12 0.71 0.49
Margin(%)

Return On Capital
-2.53 4.65 2.64 6.08 7.32
Employed(%)

Return On Net Worth(%) -5.21 1.35 0.67 3.7 4.37

Adjusted Return on Net

-5.21 1.35 0.67 3.7 4.89
Worth(%)

Return on Assets
1.85 1.62 1.68 1.61 1.61
Excluding Revaluations

Return on Assets
1.85 1.62 1.68 1.61 1.61
Including Revaluations

Return on Long Term

-3.53 6.76 3.68 8.57 10.13
Funds(%)

Liquidity And Solvency

         
Ratios
Current Ratio 1.11 1.05 1.03 1.06 1.09

Quick Ratio 1.97 1.13 0.96 1 1.03

Debt Equity Ratio 0.41 0.47 0.4 0.42 0.42

Long Term Debt Equity

0.01 0.01 -- 0.01 0.03
Ratio

Debt Coverage Ratios          

Interest Cover -1.07 1.48 1.1 2.64 2.91

Total Debt to Owners

0.41 0.47 0.4 0.42 0.42
Fund
Financial Charges
2.1 2.56 2.16 3.76 3.85
Coverage Ratio

Financial Charges
2.61 2.38 2.26 3.26 3.16
Coverage Ratio Post Tax

Management Efficiency
         
Ratios

Inventory Turnover Ratio 12 13.31 5.25 5.23 10.23

Debtors Turnover Ratio 4.7 2.35 1.12 1.16 2.06

Investments Turnover
12 13.31 5.25 5.23 10.23
Ratio

Fixed Assets Turnover

7.2 10.57 8.03 8.15 14.16
Ratio

Total Assets Turnover

3.45 5.82 4.01 3.64 6.23
Ratio

Asset Turnover Ratio 3.87 5.88 4.06 3.64 6.31

           

Average Raw Material

-- -- -- -- --
Holding

Average Finished Goods

-- -- -- -- --
Held

Number of Days In
54.35 38.25 51.79 67.78 38.76
Working Capital

Profit & Loss Account

         
Ratios

Material Cost
96.66 95.73 98.26 94.54 97.65
Composition
Imported Composition of
Raw Materials -- -- -- -- --
Consumed

Selling Distribution Cost

-- -- -- -- --
Composition

Expenses as Composition
-- -- -- 2.95 0.24
of Total Sales

Cash Flow Indicator

         
Ratios

Dividend Payout Ratio

-- -- -- 83.88 85.41
Net Profit

Dividend Payout Ratio

-- -- -- 42 48.35
Cash Profit

Earning Retention Ratio 100 100 100 16.12 23.72

Cash Earning Retention

100 100 100 58 54.72
Ratio

AdjustedCash Flow
7.56 7.4 9.41 5.66 5.1
Times

  Mar '16 Mar '15 Mar '14 Mar '13 Mar '12

Earnings Per Share -0.1 0.02 0.01 0.06 0.07

Book Value 1.85 1.62 1.68 1.61 1.61

Source : Dion Global Solutions Limited

2.0 References
 i. https://www.crisilresearch.com/industryasync.jspx?
serviceId=40&State=null#storyId#120271#sectionId#3050#newsFeedId#undefined
ii. http://www.rcom.co.in/Rcom/aboutus/ir/pdf/Annual-Report-2015-16.pdf
iii. https://www2.deloitte.com/us/en/pages/technology-media-and-
telecommunications/articles/telecommunications-industry-outlook.html
iv. http://www.ey.com/gl/en/industries/telecommunications/ey-mobile-money-the-next-wave-of-
growth-in-telecoms
v. http://www.ibef.org/industry/telecommunications.aspx
vi. https://www.crisilresearch.com/
vii. https://telecomtalk.info/here-are-the-bumps-in-the-road-that-reliance-jio-might-face
viii. http://www.rcom.co.in/Rcom/aboutus/ir/pdf/Annual-Report-2015-16.pdf