INTERNSHIP REPORT ON

“ STUDY ON EQUITY RESEARCH ON TELECOM SECTOR IN KARVY STOCK

BROKING LIMITED”

SUBMITTED BY

NAME:

USN:

VISVESVARAYA TECHNOLOGICAL UNIVERSIT, BELGAUM

In partial fulfilment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Under the guidance of

INTERNAL GUIDE EXTERNAL GUIDE

DR. SHIVARAM G. K.

DEPARTMENT OF MBA

VTU Regional Office,

Rajapura, Kusnoor Road,

Kalburgi -585106

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 CERTIFICATE

This is to certify that RACHITA R bearing USN 3vh15mba14, is a bonafide student of

Master of Business Administration course of the Institute (batch), affiliated to Visvesvaraya
Technological University, belgaum. Internship report on “A Study Equity research on
telecom sector” is prepared by her under the guidance of Shivaram G.K , in partial
fulfilment of the requirements for the award of the degree of Master of Business
Administration of Visvesvarya Technological University, Belgaum Karnataka.

Signature of Internal Guide Signature of HOD

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 DECLARATION

I, RACHITA R, hereby declare that the Internship report entitled “A Study Equity research
on telecom sector” with reference to “Karvy Stock Broking Limited, Basavangudi
(Bangalore)” prepared by me under the guidance of Mr Shivaram G.k, faculty of M.B.A
Department, VTU Regional Office, Rajapura, Kusnoor Road, Kalburgi. And external
assistance by Mr.Ramesh, Karvy Stock Broking Limited, Basavangudi, Bangalore.

I also declare that this Internship work is towards the partial fulfilment of the university
regulations for the award of degree of Master of Business Administration by Visvesvarya
Technological University, Belgaum.

I have undergone a summer projects for a period of Twelve weeks. I further declare that this
project is based on the project is based on the original study undertaken by me and has not
been submitted for the award of any degree/diploma from any other University / Intuition.

Place:

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TABLE OF CONTENTS

EXECUTIVE SUMMMARY

CHAPTER 1: INTRODUCTION

1.1 Introduction about the internship

1.2 Topic chosen for the study

1.3 Need for the study

1.4 Objectives of the study

1.5 Scope of the study

1.6 Research Methodology

CHAPTER 2: INDUSTRY AND COMPANY PROFILE

2.1 Industry profile

2.2 company profile

2.3 Promoters

2.4 Vision

2.5 Mission

2.6 Quality Policy

2.7 Products services

2.8 competitor’s information

2.9 SWOT Analysis

CHAPTER 3: THEORETICAL BACKGROUND OF THE STUDY

CHAPTER4: DATA ANALYSIS AND INTERPRETATION

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CHAPTER 5: SUMMARY OF FINDINGS, SUGGESTIONS

AND CONCLUSION

5.1 Findings

5.2 Suggestions

5.3 Conclusion

BIBLOOGRPHY

ANNEXURE

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EXECUTIVE SUMMARY;

stock market is one of the booming sector in todays economy. But this is a place where
people enter and exit within a short period.stock market is a place where money is in bulk
,you just need to grab it in a right way.professional investor will make more money and less
loss than,who let their heart rule.Their head eliminate all emotions for decision making. Be
ruthless and calculating,you are out to make money.

Decision should be based on actual movement of share price measured both in money and
percentage term and nothing else.greed must be avoided patience may be a virtue,but
impatience can frequently be profitable.

In equity analysis anticipated growth,calculations are based on considered FACTS and not on
HOPE. Equity analysis is basically a combination of two independent analysis.namely
fundamental analysis and technical analysis.

Fundamental analysis is used for long term investment.in fundamental analysis company’s
goodwill,its performances,liquidity,leverage,turn over,profitability and financial health was
checked.these includes study of financial statements,financial ratios of the company .investor
prefer fundamental analsis.

Technical analysis refers to the study of market generated data like prices and volume to
determine the future direction of prices movements.technical analysis mainly seeks to predict
the short term price travels.the focuse of technical analysis is mainly on the internal market
data. i.e. prices and volume data.it appeals mainly toshot term traders.

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 CHAPTER 1

INTRODUCTION ABOUT THE INTERNSHIP

The internship is an academic part of the master of business administration programme. It

helps satisfy academic necessity. This work term should supply the worthy insights into
industry and professional oriented side of training in business. It is a very good opportunity to
evaluate or correct our self how capable we are to take up new changes or interested to learn
the new things in actual or real working environment in the organisation.

When I enter the organisation the airspace itself teaches what we have to do and what are all
the duties and responsibilities. Uniformity is very required element that management should
maintain among their employees and outlook of an employee also create an impression on the
mind of other about their task, value performance, and principles. If we do in task in a right
way with right choice it will bring us success in a short time.

In the internship I learn about Indian stock market is extremely volatile and sensitive is
happening all over the world and the investors to think basically associated with high risk,
high yield. Risk and return are the two faces of one coin.

The Bombay stock exchange is Asia’s first and fastest stock exchange in world with the
speed of six micro seconds and one of India’s leading exchange group. it is started at 1875
known as BSE. From before 140years and another one is NSE is well-established in1994 it is
described as worlds third biggest stock exchange in counting of transactions. The nifty shares
also selected based on collateral methodology accept by the BSE.

The project gave me the clear picture about the working condition in the organization which
the help in feature. This project also helped me the study the movements of trading and also
how the organization help the customers to trade securely.

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 TOPIC CHOSEN FOR THE STUDY

“EQUITY RESEARCH ON TELECOM SECTOR”

Equity share are voting share of the company which gives ownership right to the investors.
Equity share holders are the real owners of the company through the study i am going to
analyse how this equity share perform in the telecom sector. Telecom sector is a sector where
the movement of equity is more volatile. Because of increased competition and the new
entrants to the industry because of more scope. Equity shares carry more risk than the
preferred one as the equity get dividend when there is only excess profit after giving
preferential dividend. Equity shares are the risk free source of fund to the company equity
price represent the position of the company in the market. So by analysing equity
performance one can understand weather to in or not.

OBJECTIVES OF THE STUDY

1. To analyse the telecom industry and find the future growth opportunities
2. To design strategy for profitable investment in equity which yields maximum
return
3. To look the historical performance data of the company and estimate the future of
stocks
4. To predict investor position (buy, sell & hold)
5. To identify the inherent technical strength and weakness of the equity shares
6. To understand the movement and performance of stock

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SCOPE OF THE STUDY

1. The study is conducted only on the equity shares of the company

2. The study covers 2 telecom sectors

3. Three years data has been taken into consideration for the study

Also the project is concerned with only 2 companies from among the major
players in the in the telecom sector i.e.bharti Airtel and Idea

RESEARCH METHODOLOGY

Research is process of scientific investigation and collecting data to testing

hypothesis. Efficient investigative process utilized to increment or update current
information by finding new truths. It is separated into two general classifications:
(1) Basic research is request gone for expanding logical information, and (2)
Applied research is exertion gone for utilizing essential research for taking care of
issues or growing new procedures, items, or strategies.

PRIMARY DATA

The primary sources of information collection were through discussion with the
faculties and the advisors in the company.

SECONDARY DATA

The main source of information is annual reports of the company and related
websites which has enabled it analysing the equities.

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 Sampling units, equity shares of the selected companies

Sample size: three years financial data of telecom sector.

CHAPTER 2
INDUSTRY PROFILE

History of Indian Stock Market: Indian stock market marks to be one of the oldest stock
market in Asia. It dates back to the close of 18th century when the East India Company used
to transact loan securities. In the 1830s, trading on corporate stocks and shares in Bank and
Cotton presses took place in Bombay.
Though the trading was broad but the brokers were hardly half dozen during 1840 and 1850.

An informal group of 22 stockbrokers began trading under a banyan tree opposite the Town
Hall of Bombay from the mid-1850s, each investing a (then) princely amount of Rupee 1.
This banyan tree still stands in the Horniman Circle Park, Mumbai. In 1860, the exchange
flourished with 60 brokers. In fact the 'Share Mania' in India began with the American Civil
War broke and the cotton supply from the US to Europe stopped. Further the brokers
increased to 250. The informal group of stockbrokers organized themselves as the The Native
Share and Stockbrokers Association which, in 1875, was formally organized as the Bombay
Stock Exchange (BSE).

BSE was shifted to an old building near the Town Hall. In 1928, the plot of land on which the
BSE building now stands (at the intersection of Dalal Street, Bombay SamacharMarg and
Hammam Street in downtown Mumbai) was acquired, and a building was constructed and
occupied in 1930.

PremchandRoychand was a leading stockbroker of that time, and he assisted in setting out
traditions, conventions, and procedures for the trading of stocks at Bombay Stock Exchange
and they are still being followed.

Several stock broking firms in Mumbai were family run enterprises, and were named after the
heads of the family.

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The following is the list of some of the initial members of the exchange, and who are still
running their respective business:

 D.S. Prabhudas& Company (now known as DSP, and a joint venture partner with
Merrill Lynch)
 JamnadasMorarjee (now known as JM)
 ChampaklalDevidas (now called Cifco Finance)
 BrijmohanLaxminarayan

In 1956, the Government of India recognized the Bombay Stock Exchange as the first stock
exchange in the country under the Securities Contracts (Regulation) Act.

The most decisive period in the history of the BSE took place after 1992. In the aftermath of
a major scandal with market manipulation involving a BSE member named Harshad Mehta,
BSE responded to calls for reform with intransigence. The foot-dragging by the BSE helped
radicalise the position of the government, which encouraged the creation of the National
Stock Exchange (NSE), which created an electronic marketplace. NSE started trading on 4
November 1994. Within less than a year, NSE turnover exceeded the BSE. BSE rapidly
automated, but it never caught up with NSE spot market turnover. The second strategic
failure at BSE came in the following two years. NSE embarked on the launch of equity
derivatives trading. BSE responded by political effort, with a friendly SEBI chairman (D. R.
Mehta) aimed at blocking equity derivatives trading. The BSE and D. R. Mehta succeeded in
delaying the onset of equity derivatives trading by roughly five years. But this trading, and
the accompanying shift of the spot market to rolling settlement, did come along in 2000 and
2001 - helped by another major scandal at BSE involving the then President Mr.AnandRathi.
NSE scored nearly 100% market share in the runaway success of equity derivatives trading,
thus consigning BSE into clearly second place. Today, NSE has roughly 66% of equity spot
turnover and roughly 100% of equity derivatives turnover.

Stock Exchange provides a trading platform, where buyers and sellers can meet to transact in
securities.

Capital Market: The capital market is divided into two segments viz:

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a) Primary Market

b) Secondary Market

a) Primary Market: Most companies are usually started privately by their promoters.
However the promoter’s capital and the borrowed capital from banks or financial institutions
might not be sufficient for running the business over the long term. That is when corporate
and the government looks at the primary market to raise long term funds by issuing securities
such as debt or equity. These securities may be issued at face value, at premium or at
discount. Let us understand the meaning of these terms:

Face Value: Face value is the original cost of the security as shown in the
certificate/instrument. Most equity shares have a face value of Rs. 1, Rs. 5, Rs. 10 or Rs. 100
and do not have much bearing on the actual market price of the stock. When issuing
securities, they may be offered at a discount or at a premium.

Premium: When the security is offered at a price higher than the face value it is called a
premium

Discount: When the security is offered at a price lower than the face value it is called a
discount.

b) Secondary Market:

The secondary market provides liquidity to the investors in the primary market. Today we
would not invest in any instrument if there was no medium to liquidate our position. The
secondary markets provide an efficient platform for trading of those securities initially
offered in the primary market. Also those investors who have applied for shares in an IPO
may or may not get allotment. If they don‘t then they can always buy the shares (sometimes
at a discount or at a premium) in the secondary market.

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Trading in the secondary market is done through stock exchange. The Stock exchange is a
place where the buyers and sellers meet to trade in shares in an organizational manner. The
stock exchange performs the following functions:

Provide trading platform to investors and provide liquidity

Facilitate Listing of securities

Registers members - Stock Brokers, sub brokers

Make and enforce by-laws

Manage risk in securities transactions

Provides Indices

There are two leading stock exchanges in India which help us trade are:

i. National Stock Exchange: National Stock Exchange incorporated in the year 1992
provides trading in the equity as well as debt market. Maximum volumes take place on NSE
and hence enjoy leadership position in the country today

ii. Bombay Stock Exchange: BSE on the other hand was set up in the year 1875 and is the
oldest stock exchange in Asia. It has evolved in to its present status as the premier stock
exchange.

At BSE you will find some scripts listed that are not available on NSE. Also BSE has the
largest number of scripts which are listed.

INTRODUCTION TO BSE:

As we read in the history of Indian stock exchange; the stock exchange, Mumbai, popularly
known as "BSE". BSE was established in 1875 as "The Native Share and Stock Brokers
Association". It is the oldest one in Asia, even older than the Tokyo Stock Exchange, which
was established in 1878. It is a voluntary non-profit making Association of Persons (AOP)
and has converted itself into demutualised and corporate entity. It has evolved over the years

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into its present status as the Premier Stock Exchange in the country. It is the first Stock
Exchange in the Country to have obtained permanent recognition in 1956 from the Govt. of
India under the Securities Contracts (Regulation) Act, 1956.

A Governing Board having 20 directors is the apex body, which decides the policies and
regulates the affairs of the Exchange. The Governing Board consists of 9 elected directors,
who are from the broking community (one third of them retire every year by rotation), three
SEBI nominees, six public representatives and an Executive Director & Chief Executive
Officer and a Chief Operating Officer.

The Executive Director as the Chief Executive Officer is responsible for the day-to-day
administration of the Exchange and he is assisted by the Chief Operating Officer and other
Heads of Department.

INTRODUCTION TO NSE:

The National Stock Exchange (NSE) is India's leading stock exchange covering 364 cities
and towns across the country. NSE was set up by leading institutions to provide a modern,
fully automated screen-based trading system with national reach. The Exchange has brought
about unparalleled transparency, speed & efficiency, safety and market integrity. It has set up
facilities that serve as a model for the securities industry in terms of systems, practices and
procedures.

NSE has played a catalytic role in reforming the Indian securities market in terms of
microstructure, market practices and trading volumes. The market today uses state-of-art
information technology to provide an efficient and transparent trading, clearing and

settlement mechanism, and has witnessed several innovations in products & services viz.
demutualisation of stock exchange governance, screen based trading, compression of
settlement cycles, dematerialisation and electronic transfer of securities, securities lending
and borrowing, professionalisation of trading members, fine-tuned risk management systems,
emergence of clearing corporations to assume counterparty risks, market of debt and
derivative instruments and intensive use of information technology.

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The National Stock Exchange of India Limited has genesis in the report of the High Powered
Study Group on Establishment of New Stock Exchanges, which recommended promotion of
a National Stock Exchange by financial institutions (FIs) to provide access to investors from
all across the country on an equal footing. Based on the recommendations, NSE was
promoted by leading Financial Institutions at the behest of the Government of India and was
incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the
country. On its recognition as a stock exchange under the Securities Contracts (Regulation)
Act, 1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM)
segment in June 1994. The Capital Market (Equities) segment commenced operations in
November 1994 and operations in Derivatives segment commenced in June 2000.

NSE's mission is setting the agenda for change in the securities markets in India. The NSE
was set-up with the following objectives:

establishing a nation-wide trading facility for equities, debt instruments and hybrids,
ensuring equal access to investors all over the country through an appropriate communication
network.

providing a fair, efficient and transparent securities market to investors using electronic
trading systems.

enabling shorter settlement cycles and book entry settlements systems.

meeting the current international standards of securities markets.

The standards set by NSE in terms of market practices and technologies have become
industry benchmarks and are being emulated by other market participants. NSE is more than
a mere market facilitator. It's that force which is guiding the industry towards new horizons
and greater opportunities.

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Till the advent of NSE, an investor wanting to transact in a security not traded on the nearest
exchange had to route orders through a series of correspondent brokers to the appropriate
exchange. This resulted in a great deal of uncertainty and high transaction costs. One of the
objectives of NSE was to provide a nationwide trading facility and to enable investors spread
all over the country to have an equal access to NSE.

NSE has made it possible for an investor to access the same market and order book,
irrespective of location, at the same price and at the same cost. NSE uses sophisticated
telecommunication technology through which members can trade remotely from their offices
located in any part of the country. NSE trading terminals are present in 363 cities and towns
all over India.

NSE has been promoted by leading financial institutions, banks, insurance companies and
other financial intermediaries

NSE is one of the first demutualised stock exchanges in the country, where the ownership and
management of the Exchange is completely divorced from the right to trade on it. Though the
impetus for its establishment came from policy makers in the country, it has been set up as a
public limited company, owned by the leading institutional investors in the country.

From day one, NSE has adopted the form of a demutualised exchange - the ownership,
management and trading is in the hands of three different sets of people. NSE is owned by a
set of leading financial institutions, banks, insurance companies and other financial
intermediaries and is managed by professionals, who do not directly or indirectly trade on the
Exchange. This has completely eliminated any conflict of interest and helped NSE in
aggressively pursuing policies and practices within a public interest framework.

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Participants in security market:-

 Regulators

 Stock exchanges

 Listed securities

 Depositories

 Brokers

 FII’s

 Merchant bankers

 Mutual funds

 Custodians

 Underwriters

 Bankers to an issue

Credit rating agencie

Rolling and settlement system:-

In rolling settlement, trades outstanding at the end of the day have to be settled at the end of T
+ X time framework.

 T + 5 settlement was introduced on 2nd July 2001

 T + 3 settlement was introduced on 1st April 2002

 T + 2 settlement was introduced on 1st April 2003

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Settlement cycle:-

 T Trade

 T+1 custodial confirmation final obligation

 T+2 Pay in/Pay-out of funds& shares

 T+2 Auction for shortages(At 2pm)

 T+3 Pay-in/Pay-out of funds & securities for auction

Types of order:-

 The investors place the buying and selling orders of shares with the members of the
stock exchange.

 Orders are of the following types:

 Limit order: It is an order in which the transactions are executed only at a

specified price.

 Best rate order: It is an order in which the investor provides the freedom to
the broker to carry out the order at a favourable rate quoted on that particular
date for the purpose of buying.

 Discretionary order: It is an order in which various ranges of prices are

provided by the investor for the purchase and sale of securities. A broker uses
his discretion to buy within a specified limit.

 Stop loss order: It is an order to buy or sell orders when a particular price,
either below or above the actual price is reached, due to unfavorable price
movements in the market.

Block deals:-

 It is a deal involving a minimum quantity of five lakh shares or a minimum value of

Rs. 5crore.

 There is a separate window for block deals on BSE and NSE.

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 These deals can take place only between 9.55 am and 10.25 am.

 It involves simultaneous large scale buy and sell transactions at a predetermined price.

COMPANY PROFILE

About the karvy

The karvy group is formed in 1983 at Hyderabad, India. Karvy ranks among the top
player in almost all the field it operates. Karvy computers shares Ltd is India’s largest
Register and transfer agent with a client base of nearly 500 blue chips corporate
managing over 2 core accounts. Karvy stock brokers Ltd, member of national stock
exchange of India,with over 6 lakh active accounts, it ranks among top 5 “Depository
Participants” in India, registerd with NSDL and CDSL, and Karvy COM trade is
member of NCDEX and MCX rank among the top 3 commodity brokers in the
country.Karvy insurance brokers is registered as broker with IRDA and ranks among
top 5 insurance agent in the country and for Mutual fund it has registered with AMFI
with mobilize over 5000 cores under management. Karvy global offers niche off
shoring services to client in the US.

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Karvy has 575 offices over 375 locations across India overseas at Dubai and New
york with 9000 high qualified staff.

2.3 Promoters of karvy

Karvy name itself comes from the name of directors :

K – Mr. Krishna Prasad

A – Mr.Arun

R – Mr.Radha Krishna

V – Mr.Venkatkrisna

Y – Mr.Yogendra

It began with the vision and enterprise of small group of practicing chartered
accountants who the flagship company.

2.4 Vision of karvy:

"Strive to be the leaders and experts through our processes, people and technology
offering the unique blend that delivers superior value by establishing and maintaining
the highest levels of services and professionalism".

Their values and vision of attaining total competence in their servicing has the
building block for creating a great financial enterprise, which stands solid on their
fortresses of financial strength- their various companies.

2.5 Mission of karvy:

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 "To be the leading and preferred service provider to our customers, and we aim to
achieve this leadership position by building an innovative, enterprising, and
technology driven organization which will set the highest standards of service and
business ethics".

2.6 Quality policy of Karvy:

To achieve and retain leadership ,karvy shall am for complete customer satisfaction
by combining its human and technological resources, to provide superior quality
financial services. In this process, karvy will strive to exceed customer’s expectation.

2.7 Products of karvy:

 Equity

 Future and Option

 Currency

 Mutual Fund

 Commodity

 Exchange Trading Fund

 Margin Fund

 IPOs

 NCDs / BONDs

 Fixed Deposits

Services offered by karvy:

Financial Services:

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 Equity Broking

 Depository Participant

 Wealth Management

 Commodities Broking

 Currency Derivatives

 Non-banking Financial Services

 Distribution of Financial Products

 Realty

 Registry services for Corporate

 Mutual funds

 Investment Banking

 Insurance Repository

 The Finapolis

 Forex& Currencies

Non-Financial Services:

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  Data Management Services

 International BPO

 Alternate Energy

 Data Analytics

 Market Research

Mile stones of karvy :

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Karvy group of companies:

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Organization structure of karvy:-

Karvy has board of directors as the supreme government body.

The chairmen being Mr.Parthasarathi, Managing Director as Mr.yogendra, Director

as Mr. Ramakrishna and Mr.Potluri.

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 2.8 SWOT Analysis of karvy

Strengths :

 Good data base

 Pricing Power

 Brand Name

 Technology

 Unique products

Weaknesses :

 Lack of advertisement

 Lack of loyal clientage

 Cost Structure

 Work Inefficiencies

Opportunities :

 Increased spending power

 Changing mindset of customer

 Online Market

 International Expansion

Threats :

 Intense competition

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 Substitute products

 Government Regulation

SERVICES OFFERRED BY KARVY

1. Personalised Service

Karvy give Personalised service and personal attention towards it’s customers to
ensure that they are successful in understanding client’s goal and help them to achieve
it.

2. Professional Advice

Karvy Provide expert advice on equity and portfolios with an objective to provide
consistent long term return while considering calculated market risk.

3. Long- term Relationship

It advice it’s client for long term wealth creation perspective. And to achieve this it is
exploiting short term market opportunities while not losing sight of long term
objective.

4. Access to Research Report

Karvy provide expert opinion who is expert in economics and analysis to client to
invest.

5. Transparency and confidentiality

Karvy clients get regular portfolio statements from karvy staffs via mails.

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2.9 COMPETITORS OF KARVY

Religare Enterprise Ltd is one of major competitor of karvy which offers customer
focused financial products and services and targets retail investors, high
networthindividuals,corporates and institutional clients.

India infoline group is also a major competitors of karvy which offers wide range of
products like equity, derivatives,commodity trading, mutual fund, insurance,gold
bonds etc..

Sharekhan is also one of the major player securities trading which also provide wide
range of services having more number of branches reaching customer in an easy
manner.

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Reliance money is an anildhirubhaiambanigroup ,A major player in securities market
with wide range of products and services reaching more number of customers with
cost friendly nature.

Kotak securities Ltd a Subsidiary of Kotak Mahindra bank is one of the oldest and
largest securities trading company in india. It has registered as depository participant
with NSDL and CDSL. It has more than 4 lakh trades a day which is even higher than
most renowned securities trading companies in india.

The Angel broking is one of major player in broking which provide financial services
to retail clients, which include broking, Depository services, wealth management,
portfolio etc.

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 CHAPTER 3
THEOROTICAL BACKGROUND OF THE STUDY

INTRODUCTION TO STOCK MARKET

Stock ownership of the shares of a company. Stock representative claims that the assets of the
Company and the earnings of you get more from your stock, you have shares will become
greater, whether you said that in respect of the shares, shares or stocks, and all its mean the
same thing. The holding company of the Stock implies that you are a great number of
proprietors (shareholders) is an organization that you have the privilege to demand all
organization possessed. As an owner, you have the rights to your shared, the profits of the
Company and any voting rights attached to the shares.

The representative of the stock of stock certificates, This is a bit of paper, verification of your
aggregate expense of possession. In today's PC era, inventory records are kept electronically,
also know as a holding shares. The motivation behind this was to empower the Unit to make
it less demanding for the exchange. In the past when she needed to offer his or her share of
the certificate on the human body to mediation. Now, the transaction occurred at the click of
a mouse or make a phone call.

The administration of the organization ought to be to build esteem included of shareholders in

an organization. It is important to shareholders is you have the right to part of the corporate
profits and assets, Profit sometimes to the payment of dividends."More shares your own, the
bigger part of the benefits. Your case is pertinent for resources if the organization goes
bankrupt. In liquidation, what you will pick up the back left every one of the leasers have
been paid 19 Another imperative capacity, and stock cost is its restricted obligation. That is to
say, as proprietor of the stock, you don't have to endure individual obligation of the Company
not
able to pay its obligations. The method for stock proprietorship, regardless, the most extreme
can have lost the estimation of your speculation. It must be underlined that there is no
assurance in individual stock. A few organizations pay profits, yet numerous others don't.
What's more, does not have the commitment to pay profits or even to those organizations
have customarily been to them. There are no profits, financial specialists can profit stock, it is

30
just through its thankfulness in the open business sector. Hypothesis in money markets costs
through changing every day market powers.

Take in more about supply and request is simple. It is extremely hard to comprehend what
will be what makes individuals like a specific stock and don't care for another stock. This is
to find out which messages are dynamic corporate what is in the negative. Price movement
indicates what the investors that the company is worth it. This value is determined by the
market capitalisation of the Company, which is the cost increased by the quantity of Shares in
issue.

The mainlykey factor is the impact of the value of the Company is profitable. The benefits of
profitability and long-standing companies can survive. It bodes well when you consider it. In
the event that an organization has never profit, it won't stay in business.

Open organizations must report their salary is four every year (quarterly). The Stock
Exchange of watches a rabid focus our attention on these time refers to the income of the
fourth quarter. The reason for this is that the value of the analysis of its future profitability of
the Company. If a company has a very surprising result (are better than expected prices to
jump to. If a company of the disappointing results of the 20 Some people think that this is not
possible forecast stock prices and other persons were of the view that the adoption of the
chart and view the changes in the prices of the past, you be able tochoose when to purchase
and offer. We justbe familiar with that certain is that fish the Volatile and may change the
performance price ratio of the very rapid. The most important thing is the work on stock as
follows: At the most fundamental level, the supply and request in the business sector decides
the stock cost. Value times the quantity of shares (the estimation of the business sector worth)
is an organization.

31
Theoretically, revenue is affected investors of the valuation of the company, but there are
other indicators, investors use forecasting stock prices. Remember that this is investor
sentiment, attitudes and expectations, might have a negative impact on the stock price.
There are many theories the valuation of the organization, however there are different
markers, speculators use guaging stock costs. Keep in mind this is financial specialist
assumption, dispositions and desires.

TELECOM SECTOR IN INDIAN ECONOMY

INDIA EMERGING AS A MAJOR PLAYER:

32
In 1975, the Department of Telecom (DoT) was separated from P&T. DoT was responsible
for telecom services in entire country until 1985 when Mahanagar Telephone Nigam Limited
(MTNL) was carved out of DoT to run the telecom services of Delhi and Mumbai. In 1990s
the telecom sector was opened up by the Government for private investment as a part of
Liberalisation-Privatization-Globalization policy. Therefore, it became necessary to separate
the Government's policy wing from its operations wing.

The Government of India corporatised the operations wing of DoT on October 01, 2000 and
named it as Bharat Sanchar Nigam Limited (BSNL). Many private operators, such as
Reliance India Mobile, Tata Telecom, Hutch, BPL, Bharti, Idea etc., successfully entered the
high potential Indian telecom market.

Growth of mobile technology:

India has become one of the fastest growing mobile markets in the world [2]. The mobile
services were commercially launched in August 1995 in India. In the initial 5-6 years the
average monthly subscribers additions were around 0.05 to 0.1 million only and the total
mobile subscribers base in December 2002 stood at 10.5 millions. However, after the number
of proactive initiatives taken by regulator and licensor, the monthly mobile subscriber
additions increased to around 2 million per month in the year 2003-04 and 2004-05.

Although mobile telephones followed the New Telecom Policy 1994, growth was tardy in the
early years because of the high price of handsets as well as the high tariff structure of mobile
telephones. The New Telecom Policy in 1999, the industry heralded several pro consumer
initiatives. Mobile subscriber additions started picking up. The number of mobile phones
added throughout the country in 2003 was 16 million, followed by 22 millions in 2004, 32
million in 2005 and 65 million in 2006 and over 100 million by mid of 2007. The only
countries with more mobile phones than India with 156.31 million mobile phones are China –
408 million and USA – 185 million.

33
India has opted for the use of both the GSM (global system for mobile communications) and
CDMA (code-division multiple access) technologies in the mobile sector. In addition to
landline and mobile phones, some of the companies also provide the WLL service.

The mobile tariffs in India have also become lowest in the world. A new mobile connection
can be activated with a monthly commitment of US$ 5 only. In 2005 alone 32 million
handsets were sold in India. The data reveals the real potential for growth of the Indian
mobile market.

PRESENT SCENARIO

Although India's tele-density has improved from under 4% in March 2001 to over
18% at the end of March 2007, we are way behind other developing nations. The total
annual telecom revenue is estimated to be over Rs 650 bn.
The cellular telephony segment has emerged as the fastest growing segment in the
Indian telecom industry. The mobile subscriber base (GSM and CDMA combined)
has grown from 1.9 m at the end of FY00 to 140 m at the end of July 2007. A slew of
tariff reduction in the past few years has helped the segment to gain in scale. The
cellular segment is playing an important role in the industry by making itself available
in the rural and semi urban areas where teledensity is the lowest.
As far as the Internet services are concerned, India currently has a subscriber base of
6.9 m users. Of this, around 19% is accounted for by broadband users (>=256 kbps).
The ARPU for this segment was Rs 210 at the end of FY06. PSU major, BSNL holds
the top spot with a market share of 42%, followed by MTNL with a share of 12%,.
This is followed closely by Sify, which ranks third with a market share of 11%.
On the international basic telephony front, the end of VSNL's monopoly in 2002
brought three private players in the international basic telephony business and the
immediate effect was the fall in tariffs. In the first six months only, the tariffs fell by
50% and the trend is likely to continue. With the most favored customer status given
to VSNL by fixed line majors like BSNL and MTNL going away, the segment has
been witness to fierce competition.

34
KEY POINTS:

Supply:
Intense competition has resulted in prompt service to the subscribers. However, smaller
towns and villages continue to have waiting periods on account of non-availability of
adequate infrastructure.

Demand:
Given the low penetration levels in the country and continuously falling tariffs, demand will
continue to remain higher in the foreseeable future across all the segments.

Barriers To Entry:
High capital investments
Older and well-established players who have a nationwide network
License fee
Continuously evolving technology, and
Falling tariffs.

Bargaining Power of Suppliers:

Improved competitive scenario and commoditization of telecom services has led to reduced
bargaining power for services providers.

Bargaining Power of Customers:

A wide variety of choices available to customers both in fixed as well as mobile telephony
has resulted in increased bargaining power for the customers.

35
Competition:
The entry of fourth cellular player and commencement of WLL services has resulted in
intense competition in the bigger cities. Reducing tariffs will hurt the new entrants, as they
will be unable to recover their high capital investments.

CHART SHOWING TOTAL TELECOM SUBSCRIBER BASE:

The growth of Indian mobile subscriber base continues unabated – According to TRAI
telecom subscription report, March 2016 saw 7 million new mobile subscribers added on
various telecom networks, with Bharti Airtel adding the highest! In the previous month of
Feb, India witnessed 8.7 mln new subscriber additions. India still continues to be the fastest
growing mobile market in the world – It has now added over 100 million new subscribers in
past 18 months alone! Here is how the base has grown over past 2 years.

36
Active Mobile Subscriber Base

Active subscriber base witnessed a jump of 11.24 million, which is highest registered in past
12 months. Active subscribers are the number of subscribers that have accessed their telecom
network at least once in the month. The active subscriber percentage has now grown to reach
90.60 percent. It is the highest registered till date.

Here is a chart comparing active subscriber growth with total number of subscribers.

Operator Wise Subscriber Additions [March 2016]

2016 has been a great year for Bharti Airtel – they have leaded the chart for subscriber
growth for all 3 months in 2016 taking their total tally of subscribers to 251.23 million. In the
month of March, Airtel added over 2.5 million subscribers.

State owned Telecom operator BSNL is also having a great 2016 – they added 1.5 mln
subscribers. For the first time in last twelve months, Idea Cellular subscriber additions

37
dropped below 1 million. They only managed to add 446k subscribers. On the other hand,
Tata continued its negative growth losing nearly 180k subscribers.

Top 8 Mobile Operators in Numbers

Sr. No Telecom Operator Total Subscriber Count ( till March 2016)

1 Bharti Airtel 251,237,263
2 Vodafone 197,946,755
3 Idea Cellular 175,074,042
4 Reliance Communication 102,408,072
5 Aircel 87,086,612
6 BSNL 86,345,709

38
7 Tata 60,097,988
8 Telewings/ Telenor 52,454,949

Number of customer increase in last two years comparatively December 2014 and
March 2016

Total Subscriber
Sr. Total Subscriber Count ( till Count (till Dec Increase In
No Telecom Operator March 2016) 2014) %
1 Bharti Airtel 251,237,263 229,442,407 91
2 Vodafone 197,946,755 184,989,401 93
3 Idea Cellular 175,074,042 160,459,544 92
Reliance
4 Communication 102,408,072 108,692,871 106
5 Aircel 87,086,612 82,735,354 95
6 BSNL 86,345,709 77,626,545 90
7 Tata 60,097,988 61,640,433 103
8 Telewings / Telenor 52,454,949 47,713,484 91

39
MARKET-SHARE OF THE MAJOR PLAYERS IN THE TELECOM SECTOR:

RECENT DEVELOPMENTS

The Bharti group's application for direct-to-home (DTH) broadcasting is all set to be
cleared and soon the group may be issued a letter of intent (LoI) for the DTH service.
Recently, clarifications were sought from Bharti on its foreign direct investment (FDI)
component and the equity structure, in connection with its DTH proposal.
Anil Ambani-promoted Reliance Blue Magic is expected to launch its DTH service
soon. Sun TV is also in the queue for DTH. As against the multi-operator DTH
scenario in India, in most countries, DTH attracts only one or two players.

40
Idea Cellular and Nokia Siemens Networks announced signing of a USD 500 million
GSM network expansion contract. Under the contract, Nokia Siemens Network will
expand Idea Cellular’s GSM/GPRS/EDGE networks to cover population centres
across six more circles. The 2-year contract includes supply and services of GSM
equipment, Intelligent Network, Value Added Services and Circuit and Packet core
equipment. Nokia Siemens Networks will deploy the latest state of art equipment like
flexi BTS, mini-ultra base stations, Release 4 architecture, media gateways and MSS
servers.
Spice Communications promoted by Dilip Modi, part of the B K Modi group and
providing cellular services in the states of Punjab and Karnataka, has lined up a public
issue to raise Rs 464 crore at lower band (Rs 41) and Rs 520 crore at upper band (Rs
46). The net proceeds from the issue are intended to be used for part repayment of
longterm debt, for payment of NLD and ILD license fee and related capital
expenditures to set up base infrastructure for NLD/ILD.
The Bangalore-based value-added services (VAS) provider OnMobile is planning to
tap the capital market with an initial public offering (IPO) of Rs 500-600 crore. The
company’s maiden offer is expected to open during the current financial year and it
intends to invest the proceeds for its foray into the Wireless Application Protocol
(WAP) and General Packet Radio Service (GPRS) segments. The company was
incubated by Infosys Technologies in 2000, and at present the IT major holds a 14
percent stake in it.

41
SELECTION OF THE COMPANY
After understanding the dynamics of the telecom sector and the various issues revolving
around it, three companies were chosen from a group of players in the telecom sector. Such
companies have been chosen which showed consistent performance in the past and were also
fundamentally sound.

SOME OF THE MAJOR PLAYERS IN TELECOM SECTOR ARE AS FOLLOWS:

Sr. No Telecom Operator

1 Bharti Airtel
2 Vodafone
3 Idea Cellular
4 Reliance Communication
5 Aircel
6 BSNL
7 Tata
8 Telewings / Telenor

Time (2 months duration) being a major constraint, two companies were chosen from the
whole telecom sector. Companies chosen for further analysis are:

Bharti Airtel
Vodafone

42
 CHAPTER VI
DATA ANALYSIS AND INTERPRETATION
BHARTI AIRTEL LIMITED

Bharti Airtel Ltd (Formerly known as Tele-Ventures (BTVL)) was incorporated on 7th July,
1995, for promoting investments in diversified telecom service projects. The company was
formed as a 80:20 joint venture between the Bharti Group through its subsidiary Bharti
Telecom and STET International Netherlands NV, a company promoted by Telecom Italia,
Italy.

Bharti Airtel has bagged the 'Best Emerging Market Carrier' award at the Telecom Asia
Awards 2007. The GSM service provider was adjudged best from among a list of 30 telecom
companies in the Asia Pacific region. Earlier, Bharti Airtel had won the 'Best Indian Carrier'
award for two consecutive years, in 2005 and 2006. The company introduced new products
like BlackBerry wireless solution, Airtel Live and the company was the first wireless services
operator to introduce Ring back tones(Hello Tunes). Also the company entered into the
partnerships with the leading companies like Nokia, Siemens, Ericsson and IBM for its

43
network planning, supply & management and for its IT requirements respectively. During
2005-2006, Vodafone acquired 10% economic interest in the company by way of
subscription of convertible debentures in Bharti Enterprises Ltd, representing an indirect
economic interest in Bharti Airtel Ltd and acquisition of direct interest in the company from
Warburg Pincus LLC. The company also signed a managed capacity expansion contract with
Ericsson to provide managed services and expand its GSM/GPRS network into rural India in
15 circles.

BUSINESS OVERVIEW:

Bharti is one of India's leading private sector service-provider of telecom services with more
than 20 million customers in India and is the first to have an all India presence.

The company is structured into three main units, Mobile Services which offers GSM Mobiles
Servies and Infotel Services which provides broadband & Telephone, long distance and
enterprise services which offers carriers and corporate. All the services of company is been
provided under brand name AIRTEL.

The company was first GSM Operator to have more than ten million customers and also the
first telecom company to cover all the 23 telecom circles of India. The Company has a
presence in 4,676 census towns and in 207,327 non-census towns and villages, covering an
addressable population of 59% of the total population. With this coverage facility the
company became the first operator to have an All-India footprint.

BUSINESS RISK:

44
The business is subject to extensive regulation by the Government; which could have an
adverse effect on the business. Technical failures and natural disasters could damage the
telecommunication networks. Changes in available technology could increase competition
and the capital costs.

MARKET RISK:

There is very little market risk in this segment, considering the ever increasing demand of the
telecom services. There have been substitutes for telecom services like the Postman, which
has been available for years but the demand for it is getting decreased whereas the demand
for telecom services has never been affected due to that. There is a permanent market for the
product, and it does not face any serious market risk.

VOLUME BASED BUSINESS:

The profits of the company are totally based on the volume of their business. The more
efficiently they provide the service, their turnover will increase accordingly and thereby
adding additional profits to the company’s account. With the expansion undertaken by the
company in recent times, it is slated to make the most of this situation.

FUTURE FORECAST:

In long term the demand for telecom services is expected to rise further. The reasons being
the low tariffs, technology, focus on rural areas, ever increasing population, etc. Telephony
penetration in urban areas is quite high as compared to rural penetration and as of now this is
been taken into consideration by various players. Technology is also expected to improve a
lot in the years to come, which would help not only in cost reduction but also in providing
services efficiently.

MANAGEMENT OVERVIEW:

It is evident that the management of the company is very experienced and the company looks
to be in safe and able hands. The management structure of Bharti Airtel is as follows:

45
46
PRICE INFORMATION

BSE 355.60
NSE 356.15
P/E 20.75
EPS 18.88
Market Cap. Rs.InCr 142,147.55
52 W High at BSE 400.65
52 W Low at BSE 282.30

COMPARATIVE CHART OF BHARTI AIRTEL WITH SENSEX

2500

2000

1500

Bharti Airtel
1000
BSE

500

0
Mar/13

Mar/14

Mar/15
Jan/13

Nov/13

Nov/14

Nov/15
Jul/13
Sep/13

Jan/14

Jul/14
Sep/14

Jan/15

Jul/15
Sep/15
May/13

May/14

May/15

47
From the chart given above, it is observed that there has been an upside trend in the SENSEX
as well as the Share price of Bharti Airtel. But the rise in the value of Bharti Airtel is more
than that of SENSEX.

ONE YEAR PRICE MOVEMENT OF BHARTI AIRTEL:

One Year Price Movement Of Bharti Airtel

450
400
350
300
250
200
150 One Year Price Movement
100 Of Bharti Airtel
50
0
01/Feb/15

01/Jul/15

01/Sep/15
01/Mar/15

01/May/15

01/Dec/15
01/Aug/15
01/Apr/15

01/Jun/15
01/Jan/15

01/Oct/15
01/Nov/15

48
The Chart given above shows slightly increase and decrease in the price of Bharti Airtel in
the year of 2015 but price movement keep upward movement comparatively BSE Sensex
during the last 3 years.

Bharti Airtel Profit & Loss Statement

49
 Profit & Loss account of Bharti Airtel ------------------- in Rs. Cr. -------------------

Mar 16 15-Mar 14-Mar 13-Mar 12-Mar

12 mths 12 mths 12 mths 12 mths 12 mths

INCOME
Revenue From Operations [Gross] 60,300.20 55,496.40 55,496.40 49,918.50 45,350.90
Revenue From Operations [Net] 60,300.20 55,496.40 55,496.40 49,918.50 45,350.90
Total Operating Revenues 60,300.20 55,496.40 55,496.40 49,918.50 45,350.90
Other Income 1,485.60 5,193.00 5,193.00 853.4 1,463.10
Total Revenue 61,785.80 60,689.40 60,689.40 50,771.90 46,814.00
EXPENSES
Purchase Of Stock-In Trade 51.6 71.4 71.4 20.5 183.6
Operating And Direct Expenses 15,074.70 14,602.50 14,602.50 12,751.40 12,121.00
Employee Benefit Expenses 1,869.30 1,691.50 1,691.50 1,648.10 1,511.30
Finance Costs 3,559.00 1,409.10 1,409.10 1,336.40 1,652.30
Depreciation And Amortisation Expenses 9,543.10 7,559.70 7,559.70 7,231.30 6,826.70
Other Expenses 20,968.40 19,699.90 19,699.90 19,199.70 18,064.30
Total Expenses 51,066.10 45,034.10 45,034.10 42,187.40 40,359.20
16-Mar 15-Mar 15-Mar 14-Mar 13-Mar

12 mths 12 mths 12 mths 12 mths 12 mths

Profit/Loss Before Exceptional, ExtraOrdinary Items And Tax 10,719.70 15,655.30 15,655.30 8,584.50 6,454.80
Exceptional Items -679.9 0 0 -207.1 0
Profit/Loss Before Tax 10,039.80 15,655.30 15,655.30 8,377.40 6,454.80
Tax Expenses-Continued Operations
Current Tax 2,050.10 3,109.20 3,109.20 1,998.00 1,360.40
Less: MAT Credit Entitlement 1,763.10 779 779 18 315.5
Deferred Tax 2,206.30 124.6 124.6 -202.8 313.6
Total Tax Expenses 2,493.30 2,454.80 2,454.80 1,777.20 1,358.50
Profit/Loss After Tax And Before ExtraOrdinary Items 7,546.50 13,200.50 13,200.50 6,600.20 5,096.30
Profit/Loss From Continuing Operations 7,546.50 13,200.50 13,200.50 6,600.20 5,096.30
Profit/Loss For The Period 7,546.50 13,200.50 13,200.50 6,600.20 5,096.30
16-Mar 15-Mar 15-Mar 14-Mar 13-Mar

12 mths 12 mths 12 mths 12 mths 12 mths

OTHER ADDITIONAL INFORMATION

EARNINGS PER SHARE
Basic EPS (Rs.) 18.88 33 33.02 16.69 13.42
Diluted EPS (Rs.) 18.88 33 33.02 16.69 13.42
VALUE OF IMPORTED AND INDIGENIOUS RAW MATERIALS
STORES, SPARES AND LOOSE TOOLS
DIVIDEND AND DIVIDEND PERCENTAGE
Equity Share Dividend 543.6 1,539.00 1,539.00 719.5 379.8
Tax On Dividend -70 58.6 58.6 62.2 0
Equity Dividend Rate (%) 27 77 77 36 20

50
Net Revenue

The net revenue of the company is growing at an average rate of 93.20% hence Bharti Airtel
kept no. 1 position in the Indian Telecom Sector.

PAT Growth

6,000.00
5,000.00
4,000.00 PAT Growth
3,000.00
2,000.00
1,000.00
0.00
13/Mar

Expenses

The expenses of the company are going down and the company is able to keep them within
permissible limits, Advertising and Ads expenses which are downing because of market
captured by Bharti Airtel and standalone player in Indian Telecom Sector. Ultimately, this
would enable the company to earn not only higher profit but also increase the subscriber base.

Net Profit before Tax:

The net profit of the company before tax is 77.30% between 2013 to 2015 which indicates
that the company’s growth is keeping growing

51
Profit after Tax
PAT is not consistent; it is quiet fluctuating as is observed from 2013 to 2015

PAT Growth
20,000.00
10,000.00
PAT Growth
0.00

52
BALANCE SHEET

53
Bharti Airtel
Standalone Balance Sheet ------------------- in Rs. Cr. -------------------
Mar '16 Mar '15 Mar '14 Mar '13 Mar '12

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds
Total Share Capital 1,998.70 1,998.70 1,998.70 1,898.80 1,898.80
Equity Share Capital 1,998.70 1,998.70 1,998.70 1,898.80 1,898.80
Reserves 82,446.00 76,272.10 64,727.20 52,245.30 47,528.70
Networth 84,444.70 78,270.80 66,725.90 54,144.10 49,427.50
Secured Loans 2 -1,315.20 -1,841.30 -1,236.50 -1,169.10
Unsecured Loans 42,398.10 21,567.80 10,364.00 14,216.30 15,298.50
Total Debt 42,400.10 20,252.60 8,522.70 12,979.80 14,129.40
Total Liabilities 126,844.80 98,523.40 75,248.60 67,123.90 63,556.90
Mar '16 Mar '15 Mar '14 Mar '13 Mar '12

12 mths 12 mths 12 mths 12 mths 12 mths

Application Of Funds
Gross Block 136,859.30 93,021.60 73,949.20 71,911.80 63,885.40
Less: Revaluation Reserves 2.1 2.1 2.1 2.1 2.1
Less: Accum. Depreciation 45,044.80 39,577.20 34,071.00 28,729.20 23,444.60
Net Block 91,812.40 53,442.30 39,876.10 43,180.50 40,438.70
Capital Work in Progress 3,796.60 9,066.90 1,244.20 1,030.80 4,466.50
Investments 43,026.90 43,116.90 34,523.90 28,199.10 12,337.80
Inventories 5.3 9.4 1.1 2.1 32.1
Sundry Debtors 3,793.00 3,311.00 2,165.50 2,246.80 2,134.50
Cash and Bank Balance 52.1 388.7 446 362.7 481.2
Total Current Assets 3,850.40 3,709.10 2,612.60 2,611.60 2,647.80
Loans and Advances 19,450.40 17,086.40 19,945.20 12,859.10 20,430.80
Total CA, Loans & Advances 23,300.80 20,795.50 22,557.80 15,470.70 23,078.60
Current Liabilities 34,093.00 26,466.40 21,798.60 20,061.70 16,067.20
Provisions 998.9 1,431.80 1,154.80 695.5 697.5
Total CL & Provisions 35,091.90 27,898.20 22,953.40 20,757.20 16,764.70
Net Current Assets -11,791.10 -7,102.70 -395.6 -5,286.50 6,313.90
Total Assets 126,844.80 98,523.40 75,248.60 67,123.90 63,556.90

Contingent Liabilities 99,564.10 128,251.00 103,187.10 63,028.60 59,114.50

Book Value (Rs) 211.25 195.8 166.92 142.58 130.16

RATION ANALYSIS OF BHARTI AIRTEL

54
Bharti Airtel
Key Financial Ratios
Mar '16 Mar '15 Mar '14 Mar '13 Mar '12
Investment Valuation Ratios
Face Value 5 5 5 5 5
Dividend Per Share 1.36 3.85 1.8 1 1
Operating Profit Per Share (Rs) 55.88 48.61 40.77 35.47 35.93
Net Operating Profit Per Share (Rs) 150.85 138.83 124.88 119.42 109.55
Free Reserves Per Share (Rs) -- -- -- -- --
Bonus in Equity Capital 78.37 78.37 78.37 82.49 82.49
Profitability Ratios
Operating Profit Margin(%) 37.04 35.01 32.65 29.7 32.79
Profit Before Interest And Tax Margin(%) 20.7 19.56 17.85 14.19 18.29
Gross Profit Margin(%) 21.21 21.39 18.16 14.65 18.57
Cash Profit Margin(%) 28.75 34.2 27.65 25.46 27.57
Adjusted Cash Margin(%) 28.75 34.2 27.65 25.46 27.57
Net Profit Margin(%) 12.51 23.78 13.22 11.23 13.77
Adjusted Net Profit Margin(%) 12.21 21.75 12.99 10.88 13.56
Return On Capital Employed(%) 11.25 17.32 13.18 12.07 13.14
Return On Net Worth(%) 8.93 16.86 9.89 9.41 11.59
Adjusted Return on Net Worth(%) 9.74 16.86 10.2 9.41 11.59
Return on Assets Excluding Revaluations 211.25 195.8 166.92 142.58 130.16
Return on Assets Including Revaluations 211.25 195.81 166.93 142.58 130.16
Return on Long Term Funds(%) 11.31 17.43 13.4 12.67 14.48
Liquidity And Solvency Ratios
Current Ratio 0.65 0.73 0.93 0.65 1.02
Quick Ratio 0.66 0.75 0.98 0.75 1.37
Debt Equity Ratio 0.5 0.26 0.13 0.24 0.29
Long Term Debt Equity Ratio 0.49 0.25 0.11 0.18 0.17
Debt Coverage Ratios
Interest Cover 4.01 12.11 7.42 4.91 5.98
Total Debt to Owners Fund 0.5 0.26 0.13 0.24 0.29
Financial Charges Coverage Ratio 6.69 17.48 12.83 9.04 10.22
Financial Charges Coverage Ratio Post Tax 5.8 15.73 11.35 8.22 9.34
Management Efficiency Ratios
Inventory Turnover Ratio 11,377.40 5,903.87 45,380.45 21,595.67 1,296.07
Debtors Turnover Ratio 16.98 20.27 22.63 20.7 23.14
Investments Turnover Ratio 11,377.40 5,903.87 45,380.45 21,595.67 1,296.07
Fixed Assets Turnover Ratio 0.79 0.85 0.86 0.82 0.84
Total Assets Turnover Ratio 0.91 0.78 0.84 0.9 0.84
Asset Turnover Ratio 0.54 0.64 0.7 0.69 0.71
Average Raw Material Holding -- -- -- -- --
Average Finished Goods Held -- -- -- -- --
Number of Days In Working Capital -71.25 -58.4 -17.92 -53.47 43.95
Profit & Loss Account Ratios
Material Cost Composition 0.08 0.12 0.04 0.4 0.56
Imported Composition of Raw Materials Consumed -- -- -- -- --
Selling Distribution Cost Composition -- -- -- -- --
Expenses as Composition of Total Sales 6.94 6.71 7.01 6.13 4.83
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit 7.2 11.65 10.9 7.45 6.62
Dividend Payout Ratio Cash Profit 3.18 7.41 5.2 3.18 3.26
Earning Retention Ratio 93.4 88.35 89.44 92.55 93.38
Cash Earning Retention Ratio 96.95 92.59 94.88 96.82 96.74
AdjustedCash Flow Times 2.39 0.98 0.61 1.09 1.21
Mar '16 Mar '15 Mar '14 Mar '13 Mar '12
Earnings Per Share 18.88 33.02 16.51 13.42 15.09
Book Value 211.25 195.8 166.92 142.58 130.16

55
KEY FINANCIAL RATIOS OF BHARTI AIRTEL LIMITED

Current Ratio:-
The present extent is a cash related extent that measures paying little mind to whether
a firm has enough advantages for pay its commitments all through the accompanying 12
months. It takes a gander at an organization's available assets for its present liabilities. A
present proportion of advantages for liabilities of 2:1 is normally thought to be adequate

Current Ratio = Current Asset

Current Liabilities

Current Ratio
1.5
0.93 1.02
1 0.65 0.73 0.65
0.5 Current Ratio
0
Mar Mar Mar Mar Mar
'16 '15 '14 '13 '12

Interpretation:

As the above chart shows compare to 2012 to 2016 Bharti Airtel current ratio is
increasing and decreasing in 2012 CR is 1.02 and in 2016 is 0.65 it indicates decreasing.

Debt-Equity Ratio:

The Debt/Equity proportion measures the long haul money related dissolvability of firm. It
likewise mirrors the relative extent of obligation and value in financing the advantage of the
firm. It is ascertained as takes after.

DE Ratio = Total debt

56
 Share holders equity

Debt Equity Ratio

0.6 0.5
0.5
0.4 0.29
0.3 0.26 0.24
Debt Equity
0.2 0.13
Ratio
0.1
0
Mar Mar Mar Mar Mar
'16 '15 '14 '13 '12

Interpretation:
The obligation value proportion is the relationship between the acquired asset and the
proprietor's capital. Here the above graph its clear that, the debt equity ratio of Bharti Airtel is
fluctuating.

Earnings Per Share

Profit per-offer (EPS) is the measure of income per each extraordinary offer of an
organization's stock. It can be computed in the accompanying way

EPS = Net profit available to the equity shareholders *100

Number of ordinary shares outstanding

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 Earnings Per Share
33.02
35
30
25 18.88
20 16.51
13.42 15.09
15
Earnings Per Share
10
5
0
Mar Mar Mar Mar Mar
'16 '15 '14 '13 '12

Interpretation:-

The above graph shows earnings per share of Bharti Airtel Ltd. It’s increasing from 2012 to
2016 investors might have yield good returns in Bharti Airtel Ltd.

Dividend Yield Ratio:-

Profit Yield or Dividends paid to holders of normal stock are set by administration, for the
most part with respect to the organization's income. There is no assurance that future profits
will coordinate past profits or even be paid by any stretch of the imagination. The most
generally refered to figure for profit yield is the memorable yield which is ascertained
utilizing the accompanying recipe.

Dividend Yield Ratio = Dividend

Current Market Price

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 Dividend Per Share
5 3.85
4
3
1.8
2 1.36 1 1 Dividend Per
1 Share
0
Mar Mar Mar Mar Mar
'16 '15 '14 '13 '12

Interpretation:-

The above graph shows that the dividend of Bharti Airtel keeps constant for 2012 and 2013
and from 2014 to 2015 dividend per share high rate return yield.

Dividend payout ratio

Profit payout proportion is the part of net salary a firm pays to its stockholders in profits. It is
figured as takes after;

59
Dividend payout ratio = Dividend paid *100
EPS

Dividend Payout Ratio

15 11.65 10.9
10 7.2 7.45 6.62

5 Dividend
Payout Ratio
0
Mar Mar Mar Mar Mar
'16 '15 '14 '13 '12

Interpretation:-

This expresses the organizations capacity to pay the profits to the shareholders. Indeed, even
here the installment proportion is expanding. The firm here can pay the profits. The payout
proportion is expanding steadily consistently. In the year 2012 it was 6.62 and 7.2 in 2016
and it has expanded to 9.43 in the year 2015. In case of Indian oil company also similar here
payout ratio growing slowly from 2012 to 2016, hence both company is stable to pay
dividend to their shareholders

Book Value:-

An extent used to differentiate a securities trades quality with its book.

PB Ratio= Stock Price

Total Assets – Intangible Assets and Liabilities

60
 Book Value
250 211.25
195.8
200 166.92
142.58130.16
150
100
Book Value
50
0
Mar Mar Mar Mar Mar
'16 '15 '14 '13 '12

Interpretation:-

The above graph shows the book value of Bharti Airtel slightly increasing every year, hence
it is good sign for investors those are invested.

61
 CHAPTER-IV
FINDINGS, CONCLUSIONAND SUGESSIONS

FINDINGS:

The book value of stock is increasing yearly and it gives high return on investments

62
 This expresses the organizations capacity to pay the profits to the shareholders. Indeed,
even here the installment proportion is expanding. The firm here can pay the profits. The
payout proportion is expanding steadily consistently.

Bharti Airtel Limited is leading company in India in Telecom sector so investments gives
good returns from 2012 to 2016 book value is increasing speedily.

SUGESSTION

As we evaluate the current ratio of Bharti Airtel Ltt., In that we come out Bharti Airtel is
maintaining it’s standarde,g 2:1.

Performance of Bharti Airtel is improving towards market capture compare to other

Telecom company, for this reason investor try to invest in Bharti Airtel for the purpose of
getting high return with minimum risk.

Bharti Airtel Ltd is good for investment but those are focus on more dividend high return
they have to invest in Bharti Airtel.

Other Telecom Company’s are little bit risky due to not maintained market standard e.g
2:1it bad indicates for investor, those interested to invest in that. So Bharti Airtel should
improve it’s standard 64

63
CONCLUSION:

Through the analysis we can conclude that

The valuation of equity (or stock) can be influenced by three factors : Required rate of
return, Expected growth rate and the Dividend Payout policy of the company

The valuation of stock has different approaches.

Application of all the approaches in practical is difficult and thus their results are different.

Performance of both company is better than other telecom companies.

64