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ASHISH SHARMA-10 BHARTI AIRTEL

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					FINANCIAL MANAGEMENT PROJECT ON BHARTI AIRTEL

SUBMITTED BY:Ashish Sharma Roll no. 10 FI-1

BHARTI AIRTEL
Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises. The Bharti Group, has a diverse business portfolio and has created global brands in the telecommunication sector. Bharti has recently forayed into retail business as Bharti Retail Pvt. Ltd. under a MoU with Wal-Mart for the cash & carry business. It has successfully launched an international venture with EL Rothschild Group to export fresh agri products exclusively to markets in Europe and USA and has launched Bharti AXA Life Insurance Company Ltd under a joint venture with AXA, world leader in financial protection and wealth management. Bharti Airtel is one of India's leading private sector providers of telecommunications services based on an aggregate of 61,914,666 customers as on February 29, 2008, consisting of 59,670,174 GSM mobile and 2,244,492 broadband & telephone customers. The businesses at Bharti Airtel have been structured into three individual strategic business units (SBU’s) - mobile services, telemedia services (ATS) & enterprise services. The mobile services group provides GSM mobile services across India in 23 telecom circles, while the ATS business group provides broadband & telephone services in 94 cities. The enterprise services group has two sub-units - carriers (long distance services) and services to corporates. All these services are provided under the Airtel brand. Airtel comes to you from Bharti Airtel Limited, India’s largest integrated and the first private telecom services provider with a footprint in all the 23 telecom circles. Bharti Airtel since its inception has been at the forefront of technology and has steered the course of the telecom sector in the country with its world class products and services. The businesses at Bharti Airtel have been structured into three individual strategic business units (SBU’s) - Mobile Services, Airtel Telemedia Services & Enterprise Services. The mobile business provides mobile & fixed wireless services using GSM technology across 23 telecom circles while the Airtel Telemedia Services business offers broadband & telephone services in 94 cities. The Enterprise services provide end-to-end telecom solutions to corporate customers and national & international long distance services to carriers.

All these services are provided under the Airtel brand. Bharti Enterprises is one of India’s leading business groups with interests in telecom, agri business, insurance and retail. Bharti Airtel, India’s leading integrated telecom company, has been at the forefront of the telecom revolution and has transformed the telecom sector with its world-class services built on leading edge technologies. Bharti has been a pioneering force in the telecom sector and today enjoys a strong nationwide presence. Bharti has grown successfully in partnership with various leading companies of the world - Singapore Telecom, Vodafone, Warburg Pincus, and British Telecom, to name a few. Bharti has recently forayed into the retail sector with its subsidiary Bharti Retail. It has also entered into a joint venture with Wal-Mart for setting up the supply chain, logistics and cash and carry to support the burgeoning retail market in India.

Investor Relations
Creating value for our customers, employees, investors, partners, vendors and the society at large lies at the root of our fundamental business strategy. Our core principles of trust and transparency have come a long way in helping us develop and nurture long-term relationships with our key stakeholders.

Shares
The equity shares of Bharti Airtel are currently listed on National Stock Exchange of India Limited (NSE) and The Stock Exchange, Mumbai, (BSE). Bharti Airtel offered 185,336,700 equity shares in the initial public offering (IPO) and raised Rs 8,340.15 million through this process. The shares were over subscribed 2.56 times. With this IPO, Bharti Airtel established certain important landmarks in the history of the Indian capital market. Together with being the first 100% book building process that this country has seen, the listing was completed within a record time of ten working days. of the close of the issue. Moreover the process of allotment and issue of shares was also completed within one day of the last day of pay-in. The book running lead managers for the IPO were JM Morgan Stanley and DSP Merrill Lynch and the registrars to the issue was Karvy Consultants Limited. The equity shares of Bharti Airtel are currently listed on National Stock Exchange of India Limited (NSE) and the Stock Exchange, Mumbai (BSE).

Partners
The company has a strategic alliance with SingTel. The investment made by SingTel is one of the largest investments made in the world outside Singapore, in the company. The company’s mobile network equipment partners include Ericsson and Nokia. In the case of the broadband and telephone services and enterprise services (carriers), equipment suppliers include Siemens, Nortel, Corning, among others. The Company also has an information technology alliance with IBM for its group-wide information technology requirements and with Nortel for call center technology requirements. The call center operations for the mobile services have been outsourced to IBM Daksh, Hinduja TMT, Teletech & Mphasis.

Operational Network:
Provides GSM mobile services in all the 23 telecom circles in India, and was the first private operator to have an all India presence. Provides telemedia services (fixed line) in 94 cities in India.

Vision & promise:
By 2010 Airtel will be the most admired brand in India:    Loved by more customers Targeted by top talent Benchmarked by more businesses

“We at Airtel always think in fresh and innovative ways about the needs of our customers and how we want them to feel. We deliver what we promise and go out of our way to delight the customer with a little bit more”.

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Highlights:
      Bharti Airtel to Observe Silent period from March 31, 2008. Sunil Bharti Mittal Conferred JRD Tata Corporate Leadership Award . Manoj Kohli Inducted Into The GSM Association Board . Sunil Bharti Mittal Awarded Global Telecom Sector’s Highest Honour Bharti Airtel crosses the 60 million customer mark Leading Private Equity firm Kohlberg Kravis Roberts & Co. (KKR) to Invest USD 250 million in Bharti Infratel

Company’s management and company’s share holding pattern:
Chairman Managing Director Company Secretary Auditor Sunil Bharti Mittal Vijaya Sampath S R Batliboi & Associates Qutab Ambience, H-5/12 Mehrauli Road, New Delhi, 110030, New Delhi 91-011-41666001-7 91-011-41666011-12 ir@bharti.com http://www.airtel.in 10 532454 A BHARTIARTL BHARTI IN BRTI.BO INE397D01016 1 Mumbai,NSE 03 Jul Jul Karvy Computershare Pvt Ltd, Karvy House 46, Road No 4 Street No1, Banjara Hills, Hyderabad - 500034. 91-40-23312454/23320 91-040-23311968

Registered Office Telephone Fax E-mail Website Face Value (Rs) BSE Code BSE Group NSE Code Bloomberg Reuters ISIN Demat Market Lot Listing Financial Year End Book Closure Month AGM Month

Registrar's Name & Address

Shareholding Pattern
Shares 611,423,266.00 72,504,488.00 0 31,600,390.00 1,155,645,678.00 24,569,775.00 1,895,743,597.00 [%] 32.25 3.83 0 1.67 60.96 1.29 100

Foreign Institutions Govt Holding Non Promoter Corp. Hold. Promoters Public & Others Totals

Ratio analysis:
1 Net profit margin ratio:
=Net profit*100/Net sales Year Net profit Net sales Net margin 05 1210.67 8142.44 14.86% 06 2012.08 11259.12 17.87% 07 4033.23 17906.54 22.52%

Comment: The Net profit Margin increased significantly. The high net profit margin
implies, higher return to share holders, in the form of dividend and stock price appreciation.

2 Gross-profit Margin ratio:
=Gross profit*100/Net sales Year Gross profit Net sales Gross margin 05 4080.55 8142.44 50.11% 06 7972.49 11259.12 70.81% 07 12970.02 17906.54 72.43%

Comment: The Gross profit margin has been increasing steadily, since 2005. The
reason for it can be high sales price but cost of goods sold remaining constant. The high Gross profit margin shows that the company is doing well.

3 Capital turn-over ratio:
=Net sales/Average capital employed Capital employed=share holders fund+ long term liability-misc. expenses Year Net sales Average employed CTR 05 8142.44 capital 4633.87 1.76 06 11253.12 6735.77 1.67 07 173906.54 6943.16 2.58

Comment: The capital turnover ration of Bharti Airtel Ltd. has increased over a period
of three years.

4 Debtor turn-over ratio:
=Net sales/Average debtors Year Net sales Average debtor DTR 05 8142.44 715.74 11.38 06 11253.12 895.96 12.56 07 17906.54 1247.33 14.35

Comment: The debtor turn-over ratio of Bharti-Airtel an upward trend.
Average collection period=365/DTR. ACP : 32.07 29.06 25.44

There the average collection period is decreasing. There is a sharp decline in this ratio. This shows that the firm have shortened the credit-period of debtors. It also shows, that the collection team is performing well, as a result of which ,the average collection period has come down.

5 Creditors Turn-over ratio:
=Annual Net credit purchases OR cost of purchases / Average Creditor &Bills payable Cost of purchases=Total direct expenses+{closing stock-opening stock} Year 05 Direct expenses 3728 + Stock 11.57 Cost of purchases 3739.59 Avg. creditors & 4994.29 Bills payable CTR 0.75 06 5241.17 -13.84 5227.33 4796.29 1.09 07 7905.25 30.07 7935.32 5310.81 1.49

Comment: An increase in the creditors turn-over ratio reveals, that there is decrease in
availing of credit facilities from the creditors.

7 Inventory/Stock Turn-over ratio:
=sales/closing inventory Year Sales Closing-inventory STR DIH 05 8142.44 31.58 254.87 1.43 06 11259 17.74 634.67 0.58 07 17905.8 47.81 374.52 0.97

Days of inventory holding= 365 / inventory turn-over

Comment: The Stock Turn-over ratio of Airtel, shows a mixed trend,it has a high stock
Turn-over ratio, which is considered good higher ratio ,may also indicate low investment in inventories.

8 ROE:
= {PAT-Preference dividend} *100 / share holders equity or net worth Year PAT Preference dividend Share holder equity ROE 05 1210.67 0 4533.60 26.704 06 2012.08 0 7333.43 27.44 07 4033.23 0 11413.26 35.34

Comment: It reveals that there is a little improvement in Return on Equity in 06 over
05, but drastic improvement in 07 over 06.

9 ROI:

a. RONW (Return on net worth)
= {PAT-Preference dividend}/{share holders fund+ reserves & surplus- misc. exp. not Not written off} Year Share-holders fund Preference dividend Misc. exp. Not written off PAT RONW 05 4533.60 0 58.34 1210.67 27.05 06 7333.43 0 7.94 2012.08 27.47 07 11413.26 0 7.66 4033.23 35.35

EPS
=PAT-Preference dividend/weighted Avg. no of Equity shares outstanding Year PAT Preference dividend W.A.N.O.E.S.O EPS 05 1210.67 0 185.609 6.52 06 2012.08 0 189.388 10.62 07 4033.23 0 189.593 21.27

CEPS
= {PAT-Preference dividend+ non cash charges}/ {weighted Avg. no of Equity shares outstanding} Year PAT Preference dividend Non-cash charges W.A.N.O.E.S.O CEPS 05 1210.67 0 1019.36 185.609 12.01 06 2012.08 0 1547.02 189.388 18.79 07 4033.23 0 2468.47 189.593 34.293

Comment [ROI]: Quite high ROI performance significantly better than 05 & 06 in 07


				
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