Portfoilio Mgt

Bharti Airtel

INTRODUCTION

Shareholding pattern

position of stocks

Stock of the company opened at 325 on BSE.

Current EPS – 20.54Current P/E ratio – 16.00

Share price has seen a 52-week of Rs.376.50 and of Rs.257 on BSE.

One Year Chart for Bharti Airtel Ltd.

Future plans of airtel

Current scenario of co.

"The latest TRAI (Telecom Regulatory Authority of India) report on VLR (Visitor Location Register) numbers once again reiterates Bharti Aritel's transparent reporting of customer numbers. With close to 92 percent active customer base, Bharti Airtel has ranked as the number one among all operators," the company said in a statement.

NEW DELHI-FEB,11

ECONOMIC ANALYSIS

INDIA GDP GROWTH RATE

The India GDP is worth 1217 billion dollars or 1.96% of the world economy, according to thy world Bank.

Services are the major source of economic growth, accounting for more than half of India’s output with less than one third of its labor force.

INDIA’S INFLATION RATE

Measures of inflation rates are CPI & GDP deflator.

The economy has posted an average growth rate of more than 7% in the decade since 1997, reducing poverty by about 10% points.

INDIA INTEREST RATE

INDIA CURRENT ACCOUNT

Current account is the sum of the balance of trade, net factor income & net transfer payments.

Positive net sales to abroad generally contributes to a current account surplus; negative net sales to abroad generally contributes to a current account deficit.

MAR-2006 11.33%

MAR-2007 8.82%

MAR-2008 6%

MAR-2009 5.31%

MAR-2010 5.03%

EXPORT AS A PERCENTAGE OF TOTAL SALES

FOREIGN DIRECT INVESTMENT

FDI up to 100% permitted in telecom service like electronic mail & voice mail.

FDI up to 74% is permitted for radio paging service & internet service provider.

IMPACT OF BUDGET

The allocation of Rs. 2,400 crore from the Universal Service Obligation Fund.

11,000 telecom towers across 2.4 lacks villages.

The Government expects to collect Rs. 48,335.35 crore from the telecom sector, with 3G spectrum sales contributing 75% to the total.

The increasing in Minimum Alternate Tax (MAT) from 10% to 15%, which came as a huge blow to the sector.

Industry analysis.

INDUSTRY ANALYSIS.oMeaning.

oPurpose.

The followings are some important factors which should be considered in

industry analysis.

oGrowth.

oProfitability.

oDemand-Supply.

oEntry barrier.

oCompetition and Market share.

oTechnology trends.

oGovernment Policy.

oCapacity Utilization.

oBargaining power of buyers.

• The Indian Telecommunications network with 752 million mobile connections (as on Feb 2011) is the third largest in the world. 2nd largest in terms of wireless connection.

• Telecommunication has gained momentum in India.

• This sector is growing at a speed of 45% during the recent years.

• ' Telecom Industry in India ' is regulated by 'Telecom Regulatory Authority of India' (TRAI). It has earned good reputation for transparency and competence.

INDIAN TELECOM INDUSTRY.

• Two types of players exists in ' Telecom Industry India ' community –

• State owned companies like - BSNL and MTNL.

• Private companies like - Reliance Infocomm and Tata Teleservices, Bharti Tele-Ventures, Idea Cellular, LOOP Mobile, Spice Communications etc.

• Telecom industry in India has a big market potentiality and is a fast growing sector. Government of India is eager to reconstitute this telecom industry by enacting effective policies for more investments from foreign companies.

INDIAN TELECOM INDUSTRY.

1. STRENGTH.

oVery focused on telecom.

oLeadership in fast growing cellular Segment.

oPan India footprint.

oRecognized Globally.

oStrong Brand Image.

oStrong Financials.

oUnique value added services.

SWOT ANAYSIS OF BHARTI AIRTEL

2. WEAKNESS.

o Price Competition from vodafone,Docomo.

o Untapped Rural market.

o Low GPRS speed.

SWOT ANAYSIS OF BHARTI AIRTEL

3. Opportunities.

oHuge wireless subscriber potential.

oReady-to-pay consumers for cutting edge services.

oIndia- fastest growing mobile market in the world.

oLatest and low cost technology.

SWOT ANAYSIS OF BHARTI AIRTEL

4. Threats.

oSoftware and digital content piracy.

oOther players, especially Vodafone,Loop,Docomo.

oNew Players coming in India.

o Uncertain Economic Condition.

SWOT ANAYSIS OF BHARTI AIRTEL

PORTERS 5 FORCES MODEL

1 .Threat from Competition

HIGH

Wireless Market – Top 4 garnering 75% market share

Lack of differentiation among Service Providers

Cut throat Competition

Low Switching Costs

Number Portability will have –Ve Impact

Businesses & Consumers

2.Customer Bargaining Power

HIGH

(Mobile virtual network operator)

COMPANY ANALYSIS

BALANCE SHEET RATIO ANALYSIS

Mar-06 Mar-07 Mar-08 Mar-09 Mar-10

Current ratio

0.44 0.47 0.57 0.69 0.68

Quick ratio 0.45 0.47 0.55 0.65 0.72

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INCOME STATEMENT RATIO ANALYSIS

Mar-06 Mar-07 Mar-08 Mar-09 Mar-10

Gross profit ratio

23.14 27.47 29.08 29.33 28.15

Net profit ratio

17.80 22.46 23.99 22.58 26.36

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MANAGEMENT RATIOS

Mar-06 Mar-07 Mar-08 Mar-09 MAR-10

Inventory ratio

634.52 373.35 453.06 547.83 1307.05

Account receivable ratio

12.57 14.31 12.28 12.78 15.30

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02468

1012141618

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Account receivable ratio

OVERALL PROFIT ABILITY ANALYSIS

Mar-06 Mar-07 Mar-08 Mar-09 Mar-10

Return on asset ratio

0.72 0.75 1.03 1.00 0.88

Return on investment ratio

10.62 21.27 32.90 40.79 24.82

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MARKET TEST RATIOS

Mar-06 Mar-07 Mar-08 Mar-09 Mar-10

Earning per share ratio

10.62 21.27 32.90 40.79 24.82

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1015202530354045

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Earning per share ratio

Earning per share ratio

• Quarterly result of Bharti Airtel.

Intrinsic value of March ‘12

Expected EPS = 22.07

Expected P/E ratio = 19.20

Intrinsic value for march ‘12 = 22.07 * 19.20

= Rs.424

Market price = Rs. 332

CONCLUSION