Ppt 1234842668988614 1

FIN317 GROUP PROJECT

Reliance CommunicationAnil Dhirubhai Ambani Group

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1. Reliance Communications – Over view2. Ratios3. Cash Flow 4. News items5. Conclusion

Presentation ContentPresentation Content

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Welcome Everybody

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

India’s fastest customer additions since launch

Largest integrated communications company in the private sector in India

Serving over 40 million individual and corporate customers on a global basis

More than 14,000 Towns covered.

Strategic presence in all high growth segments - wireless, global and broadband

One of the largest Next Generation Networks in the world – and only one in India

Investment of USD 5 billion Market Cap of about USD 40.00 billion

approx.

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 ratios Mar ' 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 that there 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 more than current liabilities.

Liquidity Ratio Stock has increased in 2008 and current asset has decreased more than

current 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 ratios Mar ' 08 Mar ' 07

Long term debt / Equity 

  0.48   0.67

Total debt/equity 

  0.81   0.70

Fixed assets turnover ratio 

  0.77   0.69

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Total Debt Total debt has increased. Because company is making more borrowings. The

borrowing 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 Rs 1, 07,000 while long term liabilities has only increased by Rs 57000. So the company can easily pay its debts.

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RELIANCE COMMUNICATIONSRatios ) (Rs crore)

Per share ratios  Mar ' 08 Mar ' 07

EPS (Rs)  12.53 9.43

Dividend per share 

  0.75   0.50

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Earning per share It has increased because the company has make more earning and less

expenses in 2008 as compare to 2007. Dividend per share It has increased because the company has announced more dividend in 2008

as compare to 2007. Operating Profit per share It has increased because the company has made more gross profit in 2008 as

compare to 2007 Net Operating Income per share It has increased because the company has made more net profit in 2008 as

compare to 2007.

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Profitability ratios Mar ' 08 Mar ' 07

Operating margin (%) 

  41.73   43.21

Gross profit margin (%) 

  29.26   28.82

Net profit margin (%) 

  17.45   18.63

Return on long term funds (%) 

  11.81   11.16

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Gross profit margin It has increased because gross profit has increased and sales has not

increased so much as compared to gross profit in 2008. So it has sufficient fund to meet its expenses. Cost of goods sold consumed about 70.74% of sales 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 is having problems controlling its costs.

The Net Profit Margin It has decreased because net income has increase less than as compare to

sales. 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 employed

10.96 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-operating activity

2,982.80 10,469.12

Net cash used in investing activity

-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 begin of year

2,240.40 -10,162.73

Cash and equivalent end of year

192.66 68.45

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COMPARISON AS ON 20-03-09Company

NameLast Price Market Cap.

(Rs. cr.)Sales

TurnoverNet Profit Total Assets

Reliance Comm

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 likely

to emerge a front runner to acquire UK-based Global Virtual Network Operator Vanco, a move that would bring under Indian company's fold a virtual network in various parts of the world.

According to sources in the know, the negotiations are in the last stage and the 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 of Vanco stood at 800 million dollars.

Virtual network operators are companies which lease infrastructure and bandwidth from others but provide and manage the communication needs of their 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 its customers.

Reliance Communication is offering CDMA and GSM services in India and is the 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 the

launch of its nationwide enhanced GSM service.

To begin with, RCom's GSM services would be available in 11,000 towns to be 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 others and it has invested over Rs 10,000 crore to roll out the GSM network in the last 15 months.

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

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THANKS

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