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FIN317 GROUP PROJECT
Reliance CommunicationAnil Dhirubhai Ambani Group
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1. Reliance CommunicationsOver view
2. Ratios
3. Cash Flow
4. News items
5. Conclusion
Presentation Content
Content
so
Welcome Everybody
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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
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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.
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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
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Liquidity ratiosMar ' 08 Mar ' 07
Current ratio 1.65 1.87
Quick ratio 1.63 1.86
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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.
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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
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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.
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RELIANCE COMMUNICATIONSRatios ) (Rs crore)
Per shareratios Mar ' 08 Mar ' 07
EPS (Rs) 12.53 9.43
Dividend pershare
0.75 0.50
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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.
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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
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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.
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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
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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
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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
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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.
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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.
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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.
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THANKS