gross and operating margins, EPS growth, P/E multiples)

823.56bn
Revenue in INR (TTM)

19.93bn

1995

25.29k

Year on year Bharti Airtel Ltd had net income fall 46.57 % from 42.59bn to 22.76bn despite a 12.38% increase in revenues from 715.06bn to 803.59bn. An increase in the cost of goods sold as a percentage of sales from 35.66% to 37.65% was a component in the falling net income despite rising revenues. Dividend of around 1 Rs/Share Eps Growth -19.424%

Bharti Airtel Ltd has a Debt to Total Capital ratio of 54.20%, a lower figure than the previous year's 108.05
Total debt/total equity 1.27

New Delhi: Bharti Airtel, the largest listed telecom company, saw the share price surge 4 per cent on Monday. According to a report by ICICI Securities, the company could see earnings per share or EPS double by the end of financial year 2013-14. This means expectations of the company improving profitability are very high.

Here are pointers to help comprehend the trend:

1. Earnings per share to double over two years: An analyst at ICICI Securities expects the companys earnings per share to double over the next two years to March 2014. Todays share prices are a factor of tomorrows profits. The current share price is actually a multiple of expected earnings per share or EPS for the year 2012-13 and 2013-14. The company is expected to double profits over these two years. The growth in EPS s is likely to be led by an improved operational performance and cut in the interest outgo. On a consolidated level, Bharti would be generating free cash flow in excess of Rs. 10000 crore each year, which would be used to repay the debt, the analyst at ICICI Securities said in the note.

2. Shares beaten down: Over the past one year, Bharti Airtel shares are down over 19 per cent while the BSE Sensex fell only 4 per cent. This indicates a significant underperformance by a large company.

3. Debt burden to be reduced: ICICI Securities expects the net debt to reduce to Rs. 50,681 crore in 2013-14 from Rs. 65180.0 crore in 2011-12. This means a cut in the interest outgo to Rs. 3592 crore against Rs. 3,818 crore now. The companys net profit is expected to almost double to over Rs. 8,110 crore.

4. Capex limited: Bhartis capital expenditure reduces over the next two years to Rs. 15,000 crore for 2013-14 against Rs. 18,000 crore currently. This means, with profitability rising, the company does not have to commit resources from the balance sheet to fund growth. The current capex is over 4.5 times the companys net profit. By the end of 2013-14, the capex would be less than 2 times the expected net profit of the company.

5. Impact of one-time spectrum fee: The company would pass on the increase in spectrum fee following a one-time spectrum auction. ICICI Securities expects Bharti to shell out over Rs. 30,000 crore. While the mobile tariff would go up as a result of this, there could be a significant reduction in competition as many players may not choose to pay the spectrum fee. Currently, in mobile circles like Delhi and Mumbai, there are over 10 telecom players.

I am pitching for Telecom company airtel ticker Bhartiartl, the $x market cap telecom giant 21.6% Current economic scenario I dont see a near term catalyst for the stock Its revenue increased at a cagr of around 24 % YOY I believe airtel will benefit from the shift which Reliance JioComm Entry may create problem respect to decrease in share of profit for airtel and vodafone

I believe the stock has excellent potential in the long term The country has a strong telecommunication infrastructure Mobile Banking will increase the penetration Reduction in the license fee and the charges due to spectrum With a subscriber base of nearly 898 million, India has the second-largest telecom network in the world Availability of affordable smartphones and lower rates are expected to drive growth in the Indian telecom industry Telecom penetration in the rural market is expected to to reach 70 % increased from 40% Cheaper access to financing Better brand image than competitior Expected consolidation in the industry might expect the profit to be more Airtel may acquire loop mobile which will increase the amount of customer base by around 3million There is enough spectrum for both airtel, Vodafone in the future .There extreme cut down in the presence of spectrum in case of Uninor and Systema

Strengths Biggest mobile service provider in worlds second largest telecom market Mobile phone subscriptions now follow the normal population trends around the world. With about 870 million wireless subscriptions, India ranks second after China in the wireless market. Airtel has a 22.2% share of that market.

Well-established nationwide infrastructure Airtel has been in the market for 18+ years and thus has towers and backhaul all over the country. This is a major advantage. Deployment of new technologies or increasing capacity at times requires software and minimal hardware upgrade. Having infrastructure already on the ground makes that process much faster and smoother. Secondly, it is easier to capture new customers if a telco already has a network in place. High brand equity Airtel is among Indias most visible brands omnipresent in most parts of the nation through television, print and various other forms of advertising. Celebrity endorsements and innovative advertising that understand the pulse of market are some of the assets of the Airtel brand. Superior overall network quality and reliability Bharti Airtel (along with Vodafone) runs one of the better mobile networks in India. They have nationwide penetration and although there is no dearth of consumer complaints regarding dropped calls and slow data against Airtel, it still offers a higher quality telecom service experience as compared to most other telcos. Weaknesses High competition in the telecom market Airtel, like all other service providers in India, has been adversely affected by the extreme price competition. Although the average voice call rates have gone up recently, they were as low as Rs. 0.6/min. (1 cent/min.) a few years ago. The story is similar with data and 3G tariffs. As a result, the company has been reporting declining profits for many years. ARPU had been decreasing too although it is showing signs of bottoming out now. Debt and finances According to their latest quarterly report, Airtel is burdened by $9.7 billion in net debt, which is a lot of money when converted to rupees. How can Airtel repay this debt is the question? Possibilities include stake and equity sale or spike in revenue. Depreciating rupee is also an issue since it results in foreign exchange losses and increases the financing cost. Africa acquisitions and operations Airtel acquired Zains Africa business for $9 billion in 2010. Since then, it has struggled to turn around those operations reporting repeated losses from the continent. While the Africa operation has widened the companies geography, it continues to be a drag on its balance sheet. Late adoption of 3G and advanced wireless technologies Due to various regulatory uncertainties and delayed spectrum auctions, India and Airtel were late to the 3G party. 3G services were launched by Airtel only in early 2011. The data tariffs were high, speeds were unsatisfactory and customer acceptance of 3G was slow. The company lacks nationwide 3G license with spectrum in 13 out of 22 telecom service areas. Airtels LTE network for mobile broadband is still confined to only 4 cities in India. Opportunities Untapped voice market Despite many believing that the voice market in India is close to saturation, hundreds of millions remain without a phone. Recently, VLR (Visitor Location Register) numbers released by the regulator TRAI, showed that around 730 million out of the total 870 million are active connections. Given many people in India use multiple SIMs, it is safe to say that mobile phone penetration in the country is less than 50%. The opportunity for Airtel is huge, especially in the rural segment. 3G and data revenue Airtels 3G subscribers constitute less than 5% of its total subscriber base. Apart from getting new 3G customers to join Airtel, there is immense room for growth within its existing customers. The operator should be more aggressive in marketing the benefits of high speed data access on phone. Simultaneously, it must ensure faster and consistent data speeds on its network. LTE The whole wireless world is moving towards LTE. LTE for mobile broadband can be a good solution for India where fixed broadband penetration is otherwise low. Airtel has taken the lead with this version of LTE in 4 cities, but deployment needs to catch up pace. Despite a weak LTE ecosystem in India, Airtel should portray itself as the embracer of that technology. It must pursue the device

manufacturers to produce LTE capable phones for India and then take the lead in the deployment of LTE for cellular networks too. Mergers and Acquisitions Unfortunately, the M&A rules in India are yet to formally declared although recent media reports have suggested that companies may be allowed to merge as long as their market share in every circle is less than 50%. Airtel with a market share of 22.2% should be good to acquire smaller telcos to reduce competition and add subscribers and spectrum. Such acquisitions will incur huge spectrum costs, but it could be well worth it in the long term. Threats Unfriendly regulatory environment The telecom industry in India has been plagued by a hostile and unstable regulatory scenario. This has adversely affected the industry sentiment and the wireless service providers. While some clarity has begun to emerge, many guidelines are far from certain. Airtel has not remained untouched from this chaos. And this threat would continue to linger for the next few years. Spectrum Auctions and Refarming Government of India and TRAI kept a high reserve price for 3G, BWA and the recent 1800 MHz auction. Airtel had spent Rs. 123 billion ($2.7 billion per rupee to dollar conversion back then) for 3G airwaves. Since the returns are slow due to low tariffs, buying the spectrum at high price is detrimental for the telcos. Refarming 900 MHz is another terrible idea which would negatively impact Airtels finances, given that it will have to repurchase those airwaves to continue 2G operations. Mobile Number Portability MNP gives the customer independence to change the service provider while retaining the number. With similar tariffs across various telcos and satisfaction with the current service provider being low, consumers are willing to jump ship. The larger incumbent operators are losing millions of customers to the newer players who attract these customers with their freebies and innovative offers.

Cost advantage Airtel Core competency Funding of the company Balance sheet figures Upside and downside

Stock Wisdom of Market Experts/Brolers Wisdom of media Wisdom of analysts Tips from friends and relatives Fund managers views Managers view Wrong stocks wrong timing

Behavioral finance

High dividend - Select But price may not appreciate Low P/E Select Stocks lower than book value Book inflated Great companies High price stock wait for long time Growth Everybody chasing them software stocks steel -2005 2006 Material strong demand Best buy

A common task in the Sales & Trading internship interview is the stock pitch. They ask you to pretend youre on the phone with a client and you have 45 seconds or so to pitch them a stock.Beyond that, they will not give you much guidance. Its very important to use this opportunity to impress them.

Back when I pitched to Goldman, there was no iPhone or and RIM, the maker of BlackBerry, was relatively unknown, so I discussed Motorola, a top cell phone handset company at the time. I began by pointing out some financials such as what their earnings per share (EPS)
level was and how that had grown over time, how they had expanded their margins, and how the market had recently penalized them for capital expenditures that would actually help them grow in the near term. After

that I went into trends discussing the macro drivers that were helping to fuel growth in the industry (e.g., greater penetration of cellular technologies in emerging markets and Motorolas dominance in many of those regions). I closed my pitch by also talking about Motorolas competitors and management team strength. This showed my interviewers that I hadnt just researched one company and that I had some knowledge on the industry as a whole. Also, dont be afraid to say, You know I dont know the answer to that question but can I get back to you on that? It shows your integrity and

honesty and is far better than bluffing your way out of the situation. It will also put a smile on the interviewers face since it shows your ability to engage them as you might a client.

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How to pitch a stock

Focus on the positives. Have two or three reasons why the stock will appreciate in value over the next year or two. For example:

Revenues are growing: Maybe your pick is gaining market share from the competition with a superior product or maybe market-adoption is low and everyone is growing. Margins are expanding: Maybe the market is recovering and economies of scale are kicking in, maybe your pick has better products that demands higher prices, or maybe input costs are dropping. Operating leverage: As your pick grows, R&D and SG&A expenses grow at a lower rate resulting in higher operating margin. Your pick is paying down debt with free cash flow. Your pick plans to expand store count in Europe and Asia.

Dont flip flop. Have an opinion, stick with it and defend it. Picking stocks is an art with no right answer. So pick a stock, analyze it and focus on two or three points on why you like it. Avoid the but. Dont challenge your positives. For example, dont say the company should grow the top line (revenues) by 20% y/y for the next two years then continue but the market is becoming more competitive. If you believe they can grow 20%, then focus on that and have a solid counter argument as to why they will beat the competition (in case the interviewer asks).
For many positions, the stock pitch is the biggest part of the interview. It gives the interviewee the opportunity to explain his or her thought process and the way they evaluate an investment opportunity. It can separate the fakers from the legitimate candidates. In many cases it can be the difference between being asked back and being sent home. But there's no class you can take that teaches you to properly pitch a stock. And there's plenty of people on this forum who are better resources than I am, and hopefully they'll chime in, but I've pitched the same 5 companies dozens of times and seeing the pitches that succeed and the ones that fail, I'd like to share my experience as to how you should go about pitching a stock in an interview. Getting right to it, here's my checklist of things you should be sure to include when pitching a stock in an interview. 1. Industry Overview Rather than starting with the company itself, outline the industry it is apart of and begin making your case for why it's an attractive place to be investing. Consider the following questions: What makes this industry economically viable? What makes the

barriers to entry high enough to keep competition from destroying these economics? What is pricing power like and why do consumers accept it? For the consultant-types among you, think Porter's Five Forces. But I hate those. 2. Company-Specific Overview Now explain where the company you're pitching fits in with the overall industry. Is it a market-leader, does it dominate a specific niche within the sector, or what makes it attractive compared to its competition? We'll get to valuation later, but if the reason you're pitching this company rather than another is simply that it's underpriced relative to competitors, be sure to highlight why your company is no different than the others in the industry then. Know the major profitability metrics for the business compared to competitors, such as gross and operating margins, EPS growth, and anything specifically relevant to the industry. 3. Where the Market Is Wrong It wouldn't be a great opportunity unless the market was missing something, so this is where you want to point out why the security might be underpriced, what the catalyst(s) will be that changes this, and why you think that catalyst will happen. There's no specific information I can give you here since I think this is what separates a good analyst from a great analyst... just having the "edge" (I hate that word) to see right away that there's questions to be asked and possibly something Wall Street isn't seeing. Normally it's going to be something like the market not understanding a specific growth opportunity, an expense-related advantage, or a one-off event that people perceive as a fundamental shift in the business. 4. Valuation This one's tough since you don't have 6 hours to explain every facet of a model or something ridiculous like that. What's important to know is the multiples for your company, the industry, and why there is a difference or why there should be a difference. This will usually relate to whatever it is the street is missing. Be sure to know the basics of your company's capital structure and what valuation metrics are important. This is a good opportunity to demonstrate that you're not retarded and know when to use EV/EBITDA over P/E or something else. Also important is some notion of a price target post-catalyst, and some estimation of what you think would happen to the stock price if the catalyst worked against you. This gives the interviewer a chance to see that you understand what risk/reward is. Bravo! And remember, don't spend too much time on any one part of your stock pitch. Th e pitch shouldn't take much more than 5-10 minutes and leave plenty of time for the interviewer to start up a conversation and ask some questions. Being succinct is as important as being right.