Financial Analysis

BHARTI TELE-VENTURES

Financial Report for 2004-2005

BHARTI TELE-VENTURES

Introduction......................................................................... 3

Objective............................................................................3

A brief introduction of the company............................................ 4

Organization Structure............................................................5

Bharti's SWOT analysis...........................................................5

The literature Search................................................................6

Ratio Analysis.......................................................................6

Conclusions and Recommendations............................................14

Limitations.........................................................................14

Bibliography

Appendix 1. Financial Statement

Appendix 2. Ratios on Spread sheet

Introduction

Telecommunication is one of the fastest growing sector in India. Today one out of three people have a mobile in the world (source Economic Times, 18th Sep.2005); while in India the ratio is 9.7 out of 100 this shows the growth potential of the sector.

Year 1995 2000 2005

Teledensity per100 0.8 2.7 9.7

Source Business Today 25th Sep. 2005

Currently subscriber base of mobile is of 60mn in India and government is expecting to achieve 250mn telecom subscriber by end 2007. For this they are targeting lower income group people.

Year 1995 2000 2005

Subscriber Negligible 1.9mn 60.3mn

Source Business Today 25th Sep. 2005

One of the reason for this phenomenal growth is lower tariff .Our tariff structure is lowest in world in 1995 it was Rs.14.5 while currently i.e. in 2005 it is Rs.0.40 for per minute of uses (Source Business Today 25th Sep. 2005).

But for the faster growth we are lacking in infrastructure, older demand of industry to increase the spectrum should be filled to improve the mobile service and increase the subscriber base.

So it will be interesting to analyze a sector which is consistently growing with a phenomenal growth after reducing their prices. Ultimately this is the reason we have chosen this sector company to analyze the financial performance of a company for this we have chosen Bharti Tele-venture.

Objective

Our main objective is to analyze the financial position of Bharti Tele-venture with the help of different ratios available. As we all know ratio analysis is one of the generally accepted tool through which we can get an idea about the performance of the company and find out that where we need to improve and how can we manage it.

We are going to take one ratio at a time and we will be commenting on each ratio compare it with the company's previous year ratios and we would even be comparing it with the ratios of other companies in the sector.

Bharti Tele-Ventures

A brief introduction

Bharti Tele-Ventures is one of India's leading private sector providers of telecommunications services based on an aggregate of 14,429,157 customers as of August 31, 2005, consisting of 13,413,711 GSM mobile and 1,015,446 broadband & telephone customers.

The businesses at Bharti Tele-Ventures have been structured into two main strategic business groups - the Mobility Leaders business group and the Infotel Leaders business group. The Mobility business group provides GSM mobile services across India in twenty-three telecom circles, while the Infotel business group provides broadband & telephone services, long distance services and enterprise services. All these services are provided under the Airtel brand. Its break up for income from its business group is -

Source ABN AMRO

As it is evident from above graph is that its main business is Mobile service, with 13.4mn subscriber its brand Airtel is leader in India. This can be seen by the market share structure of different mobile player in India

Source ABN AMRO

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 partners include Ericcson, Nokia, Siemens and IT partners include IBM, Bharti is the first mover in telecom sector in India which has outsourced their network department of business which gives an opportunity to concentrate on core business to develop its cellular market.

Bharti's Chairman is Mr. Sunil Bharti Mittal and Jt. M.D. is Mr. Akhil Gupta. Its major shareholders are following:-