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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Inventory ratio
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
05
1015202530354045
6-Mar 7-Mar 8-Mar 9-Mar 10-Mar
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