8/12/2019 173962_633749641382719280

1/20

FIN317 GROUP PROJECT

Reliance CommunicationAnil Dhirubhai Ambani Group

8/12/2019 173962_633749641382719280

2/20

2 of 15

1. Reliance CommunicationsOver view

2. Ratios

3. Cash Flow

4. News items

5. Conclusion

Presentation Content

Content

so

Welcome Everybody

8/12/2019 173962_633749641382719280

3/20

Reliance communication Ltd.

Type Public (BSE: RCOM)

Founded 2004

Headquarters Navi Mumbai, India

Key people

Anil Ambani, Chairman and Managing Director [1], Vice-

Chairman Reliance-ADA GroupS. P. Sukula CEO - Personal Business & Director -Reliance Telecom

Industry Telecommunications

Products CDMA service, GSM service, Broadband Internet Service

Revenue US$ 4 Billion

Employees 33,000

Website www.rcom.com3 of 15

http://en.wikipedia.org/wiki/File:Relcomm.png

8/12/2019 173962_633749641382719280

4/20

4 of 15

Reliance Communications

Indias fastest customer additions since launch

Largest integrated communicationscompany in the private sector in India

Serving over 40million individual andcorporate customers on a global basis

More than 14,000 Towns covered.

Strategic presence in all high growthsegments - wireless, global andbroadband

One of the largest Next GenerationNetworks in the world and only onein India

Investment of USD 5 billion

Market Cap of about USD 40.00 billionapprox.

http://www.reliancecommunications.co.in/Communications/Rconnect/rconnect_cardn.html

8/12/2019 173962_633749641382719280

5/20

Price ListDate Open High Low Close Change

16-Mar-09 151 157 141 157

09-Mar-09 135 136 131 132

02-Mar-09 152 153 143 143

24-Feb-09 152 158 150 157

16-Feb-09 178 182 170 170

5 of 15

8/12/2019 173962_633749641382719280

6/20

Liquidity ratiosMar ' 08 Mar ' 07

Current ratio 1.65 1.87

Quick ratio 1.63 1.86

6 of 15

8/12/2019 173962_633749641382719280

7/20

Current ratio

Ideally the figure should always be greater than 1, which would indicate thatthere are sufficient assets available to pay liabilities, should the need arise.The higher the figure the better.

Current ratio has decreased because current assets has decreased morethan current liabilities.

Liquidity Ratio

Stock has increased in 2008 and current asset has decreased more thancurrent liabilities. So it put a negative effect on liquidity. But it is sufficient for

the company to pay its debts.

7 of 15

8/12/2019 173962_633749641382719280

8/20

Leverage ratiosMar ' 08 Mar ' 07

Long term debt/ Equity

0.48 0.67

Totaldebt/equity

0.81 0.70

Fixed assetsturnover ratio

0.77 0.69

8 of 15

8/12/2019 173962_633749641382719280

9/20

Total Debt

Total debt has increased. Because company is making more borrowings. Theborrowing is increased by Rs 55000 which is much higher than equity capital.So the company has to be lowered down the ratio

Total Long Term Debt

It has sufficient capital to pay its debt. Because assets has increased by Rs1, 07,000 while long term liabilities has only increased by Rs 57000. So thecompany can easily pay its debts.

9 of 15

8/12/2019 173962_633749641382719280

10/20

RELIANCE COMMUNICATIONSRatios ) (Rs crore)

Per shareratios Mar ' 08 Mar ' 07

EPS (Rs) 12.53 9.43

Dividend pershare

0.75 0.50

10 of 15

8/12/2019 173962_633749641382719280

11/20

Earning per share

It has increased because the company has make more earning and lessexpenses in 2008 as compare to 2007.

Dividend per share

It has increased because the company has announced more dividend in2008 as compare to 2007.

Operating Profit per share

It has increased because the company has made more gross profit in 2008as compare to 2007

Net Operating Income per share

It has increased because the company has made more net profit in 2008 ascompare to 2007.

11 of 15

8/12/2019 173962_633749641382719280

12/20

Profitability ratiosMar ' 08 Mar ' 07

Operatingmargin (%)

41.73 43.21

Gross profitmargin (%)

29.26 28.82

Net profitmargin (%)

17.45 18.63

Return on longterm funds (%)

11.81 11.16

12 of 15

8/12/2019 173962_633749641382719280

13/20

Gross profit margin

It has increased because gross profit has increased and sales has notincreased so much as compared to gross profit in 2008. So it has sufficientfund to meet its expenses. Cost of goods sold consumed about 70.74% ofsales revenue.

The Operating Profit Margin Net operating income has decreased more than sales in 2008. This is

significantly lower than the 2007, indicating that Reliance Communication ishaving problems controlling its costs.

The Net Profit Margin

It has decreased because net income has increase less than as compare tosales. Because expenses are increasing faster than sales.

Return on long term fund

It has increased because investment is increased by Rs. 80000.

13 of 15

8/12/2019 173962_633749641382719280

14/20

RATIOS CONTD.EBITDA margin 28.44 29.21

Return on equity 11.74 10.41

Return on capital

employed10.96 9.65

Interest coverage

ratio 8.43 5.01

14 of 15

8/12/2019 173962_633749641382719280

15/20

Cash flowMar ' 08 Mar ' 07

Profit before tax 2,604.09 2,420.85

Net cash flow-operatingactivity

2,982.80 10,469.12

Net cash used in investingactivity -11,263.87 -4,883.86

Net cash used in fin.activity

6,234.75 4,645.92

Net inc/dec in cash and

equivalent

-2,047.74 10,231.18

Cash and equivalent beginof year

2,240.40 -10,162.73

Cash and equivalent end ofyear

192.66 68.45

15 of 15

8/12/2019 173962_633749641382719280

16/20

COMPARISON AS ON 20-03-09CompanyName

Last Price Market Cap.(Rs. cr.)

SalesTurnover

Net Profit Total Assets

RelianceComm

153 31,734 14,792 2,586 45,126

Bharti Airtel 560 106,595 25,761 6,244 26,811

Idea Cellular 46 14,353 6,719 1,044 10,060

Tata Comm 456 12,960 3,283 304 6,941

MTNL 64 4,050 4,722 406 11,921

16 of 15

8/12/2019 173962_633749641382719280

17/20

Vanco

NEW DELHI: Anil Ambani Group company Reliance Communications is likelyto emerge a front runner to acquire UK-based Global Virtual NetworkOperator Vanco, a move that would bring under Indian company's fold avirtual network in various parts of the world.

According to sources in the know, the negotiations are in the last stage andthe deal could be closed by the end of this week.

Although the final price of the deal is not known, at its peak the market cap ofVanco stood at 800 million dollars.

Virtual network operators are companies which lease infrastructure andbandwidth from others but provide and manage the communication needs oftheir clients.

17 of 15

8/12/2019 173962_633749641382719280

18/20

Contnd.

According to sources, 12 international players are in the fray including AT&T,BT, T-System, NTT and private equity firms like Platinum and Oakley.

Vanco has over 750 million dollars worth long-term contracts from itscustomers.

Reliance Communication is offering CDMA and GSM services in India and isthe only player who has been offering the services on both platforms.

18 of 15

8/12/2019 173962_633749641382719280

19/20

Reliance Communications launches GSM services

The Anil Ambani-led Reliance Communications on Tuesday announced thelaunch of its nationwide enhanced GSM service.

To begin with, RCom's GSM services would be available in 11,000 towns tobe extended to 22,000 in the next few months, ADAG Group Chairman Anil

Ambani said announced in Mumbai.

RCom was the first company being awarded dual spectrum ahead of othersand it has invested over Rs 10,000 crore to roll out the GSM network in thelast 15 months.

He said RCom would look forward to participating in 3G auctions for bothGSM and CDMA services.

19 of 15

8/12/2019 173962_633749641382719280

20/20

THANKS