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BHARATI AIRTEL

SUBJECT Financial statement Analysis

By
Nisha Sundriyal
Milan Vijju

Bhrati Airtel

About The Company


Bharti Airtel, is Asias leading integrated telecom services provider with operations in India and
Sri Lanka. Established in July 07, 1995, as a Public Limited Company. Bharti Airtel has been at
the forefront of the telecom revolution and has transformed the sector with its worldclass
services built on leading edge technologies.
Bharti Enterprises is one of Indias leading business groups with interests in telecom, retail,
manufacturing, agri business and financial services. Bharti has recently forayed into retail
business as Bharti Retail Pvt. Ltd. under a MoU with WalMart for the cash & carry business. It
has successfully launched an international venture with EL Rothschild Group to export fresh agri
products exclusively to markets in Europe and USA and has launched Bharti AXA Life Insurance
Company Ltd under a joint venture with AXA, world leader in financial protection and wealth
management.

Bharti Airtel is Indias largest integrated and the first private telecom services provider with a
footprint in all the 23 telecom circles. Bharti Airtel since its inception has been at the forefront of
technology and has steered the course of the telecom sector in the country with its world class
products and services.

The businesses at Bharti Airtel have been structured into three individual strategic business units
(SBUs) Mobile Services, Airtel Telemedia Services & Enterprise Services. The mobile
business provides mobile & fixed wireless services using GSM technology across 23 telecom
circles while the Airtel Telemedia Services business offers broadband & telephone services in 95
cities and has recently launched India's best DirecttoHome (DTH) service, Airtel digital TV.
The Enterprise services provide endtoend telecom solutions to corporate customers and
national & international long distance services to carriers. All these services are provided under

the Airtel brand. Airtel's highspeed optic fibre network currently spans over 90,205 kms
covering all the major cities in the country.

Business description
Bharti Airtel Limited is a leading global telecommunications company with operations in 18
countries across Asia and Africa. Headquartered in New Delhi, India, the company ranks
amongst the top 3 mobile service providers globally in terms of subscribers. In India, the
company's product offerings include 2G, 3G and 4G wireless services, mobile commerce, fixed
line services, high speed DSL broadband, DTH, enterprise services including national &
international long distance services to carriers. In the rest of the geographies, it offers 2G, 3G,
4G wireless services and mobile commerce. Bharti Airtel had over 363 million customers across
its operations at the end of September 2016.

Vision of the Company


Our vision is to enrich the lives of our customers. Our obsession is to win customers for life
through exceptional experience.

Objectives of Company
Our vision is to enrich the lives of our customers. Our obsession is to win customers for life
through exceptional experience.

Products and services offered by the company:


Mobile

Prepaid

Postpaid
Broadband & Internet

Speed on demand

Airtel PC secure

Airtel Net PC

IPTV
Digital TV
Data and IP Solutions
Wireless Internet

Data Card

USB Modem
Email on the go

Windows Mobile 5.0

Airtel Easy Mail


Calling Cards

International Calling Cards

Airtel Call Home

Airtel World Calling Cards

Directors Report

DEAR MEMBERS,
This is 21st Board Report on the Company's business and operations, together with audited
financial statements and accounts for the financial year ended March 31, 2016.

Company Overview
Bharti Airtel is among the top three mobile service providers globally with presence in 20
countries, including India, Sri Lanka, Bangladesh and 17 countries in the African continent.
The Company's diversified service range includes mobile, voice and data solutions, using 2G, 3G
and 4G technologies. Its service portfolio comprises an integrated suite of telecom solutions to
its customers, besides providing longdistance connectivity in India, Africa and the rest of the
world. The Company also offers Digital TV and IPTV services in India. All these services are
rendered under a unified brand 'airtel', either directly or through subsidiary companies.
The Company also deploys and manages passive infrastructure pertaining to telecom operations
through its subsidiary, Bharti Infratel Limited, which also owns 42% of Indus Towers Limited.
Together, Bharti Infratel and Indus Towers are the largest passive infrastructure service providers
in India.

Financial Results
In compliance with the provisions of Companies Act, 2013 and SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, (Listing Regulations), the Company has prepared
its standalone and consolidated financial statements as per Indian Generally Accepted
Accounting Principles (IGAAP) for the FY 201516. In addition, the Company has also prepared
consolidated financials as per the International Financial Reporting Standards (IFRS). The
standalone and consolidated financial highlights of the Company's operations are as follows:

The financial results and the results of operations, including major developments have been
further discussed in detail in the Management Discussion and Analysis section.

Share Capital
During the year, there was no change in the Company's issued, subscribed and paidup equity
share capital. On March 31, 2016, it stood at Rs. 19,987 Mn, divided into 3,997,400,102 equity
shares of Rs. 5/ each.

General Reserve
The Company has not transferred any amount to the General Reserve for the financial year ended
March 31, 2016.

Dividend
Your Directors have recommended a final dividend of Rs. 1.36 per equity share of Rs. 5 each
fully paidup (27.2 % of face value) for FY 201516. The total final dividend payout will
amount to Rs. 5,436 Mn, excluding tax on dividend. The payment of final dividend is subject to
the approval of shareholders in the Company's ensuing Annual General Meeting (AGM).
The Register of Members and Share Transfer Books will remain closed from Saturday, August
13, 2016 to Friday, August 19, 2016 (both days inclusive) for the purpose of payment of final
dividend for the FY 201516, if declared at the ensuing AGM.

Auditors Report
the standalone financial statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the accounting principles generally
accepted in India, of the state of affairs of the Company as at March 31, 2016, its profit and its
cash flows for the year ended on that date.

Abridged Annual Report


In terms of the provision of Section 136(1) of the Companies Act, 2013, Rule 10 of Companies
(Accounts of Companies) Rules, 2014 and Regulation 36 of the Listing Regulations, the Board
of Directors has decided to circulate the Abridged Annual Report containing salient features of
the balance sheet and statement of profit and loss and other documents to the shareholders for FY
201516, who have not registered their email id. The Abridged Annual Report is being
circulated to the members excluding Annexures to the Board's Report viz. the 'Disclosure on
ESOPs', 'Policy on Nomination, Remuneration and Board Diversity', 'Secretarial Audit Report',
'Annual Report on Corporate Social Responsibility u/s 135 of the Companies Act, 2013',
'Business Responsibility Report', 'Report on Corporate Governance and Auditors' Certificate on
compliance of conditions of Corporate Governance', 'Extract of Annual Return', 'Note on Energy
Conservation, Technology Absorption and Foreign Exchange Earnings & Outgo' and
'Disclosures relating to remuneration u/s 197(12) read with Rule 5(1) and Rule 5(2) of the
Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014'.
Members who desire to obtain the full version of the report may write to the Company Secretary
at the registered office address and will be provided with a copy of the same. Full version of the
Annual Report will also be available on the Company's website www.airtel.com.

FINANCIAL RATIO ANALYSIS OF BHARTI AIRTEL


In Millions of INR except Per Share
12 Months Ending

Current assets

FY 2012
03/31/2012

FY 2013
03/31/2013

FY 2014
03/31/2014

FY 2015
03/31/2015

FY 2016
03/31/2016

140,380

62,033

67,381

1,47,558

1,14,057

Current liabilities
Current Ratio

93,283.8
0.73

1,05,259.8
0.32

1,18,860.6
0.35

1,21,599.1
0.64

Current ratio
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
Mar '12

Mar '13

Mar '14

Mar '15

Mar '16

Analysis:
The table reveals that the current ratio was 0.73 up to March 2012 which decreased to 0.32 in the
next year. Further it keeps on increasing in the subsequent years till year ending March 2015. In
the year ending March 2016, the current ratio falls from 0.64 to 0.41. This can be due to down
fall in current assets or payment of current liabilities.

Gross Profit Ratio:

Particulars

Mar 12

Mar 13

Mar 14

Mar 15

Mar 16

1,49,450.9
0.41

Gross Profit
Sales
Gross Profit Ratio

----------------------------- in Crore ---------------------------10,684.18


12,659.11
13,247.5
13,997.52
14,958.39
41,809.82
46,712.62
48,741.8
49,964.82
51,582.45
26.5%
27.6%
27.8%
28.0%
28.9%

Gross Profit Ratio


29.50%
28.90%

29.00%
28.50%
28.00%

27.60%

27.80%

28.00%

27.50%
27.00%
26.70%
26.50%
26.00%
25.50%
Mar '12

Mar '13

Mar '14

Mar '15

Mar '16

Analysis:
The table shows that the gross profit ratio is having an increasing trend. From the year ending
March 2012 it had keep on increasing till year ending March 2016 from 26.70% to 28.90%. It
shows that the operations of the company are going efficiently. This higher ratio may be due to
low cost or high sales.

Net Profit Ratio:

Particulars

Mar 12
Mar 13
Mar 14
Mar 15
Mar 16
----------------------------- in Crore ----------------------------

Net Profit
Sales
Net Profit Ratio

7,418.39
41,809.82
18.7%

8,785.21
46,712.62
19.8%

9,258.36
48,741.8
19.9%

9,607.73
49,964.82
20.0%

9,844.71
51,582.45
20.1%

Net Profit Ratio


20.50%
20.00%

19.80%

19.90%

20.00%

20.10%

19.50%
19.00%
18.70%
18.50%
18.00%
Mar '12

Mar '13

Mar '14

Mar '15

Mar '16

Analysis:
The table shows that the net profit ratio is having an increasing trend. From the year ending
March 2012 it had keep on increasing till year ending March 2015 from 18.7% to 20.1%. In the
year ending March 2016, the net profit was 20.1%. This shows a steady growth in the net profit.
It is noted that company is making regular growth in profits and is able to pay good returns to the
shareholders.

Debt Equity Ratio:

Particulars
Long Term Debt

Mar 12
Mar 13
Mar 14
Mar 15
Mar 16
----------------------------- in Crore ---------------------------11,575.2
14,896.1
15,578.8
18,702.8
20,919.5

Equity
Debt Equity Ratio

6,250.5
0.54

5,809.4
0.39

4,362.6
0.28

3,553.3
0.19

2,719.4
0.13

Debt Equity Ratio


0.6
0.54
0.5
0.4

0.39
0.28

0.3

0.19

0.2

0.13

0.1
0
Mar '12

Mar '13

Mar '14

Mar '15

Mar '16

Analysis:
The table shows a downward fall in debt equity ratio. From the year ending March 2012 to year
ending March 2016 it shows decline from 0.54 to 0.13. The debt equity ratio is useful for
deciding upon the capital structure and it indicates that financial leverage of the company is low.

Return on Investment (ROI):

Particulars
Return on Investment

Mar 12
30.49

Mar 13
31.27

Mar 14
30.93

Mar 15
28.11

Mar 16
25.93

Return on Investment
35
30

31.27

30.49

30.93
28.11

25

25.93

20
15
10
5
0
Mar '12

Mar '13

Mar '14

Mar '15

Mar '16

Analysis:
The above table shows that the return on investment in the year ending March 2012 was 30.49
which increased in the subsequent year to 31.27. In the year ending March 2014, the return on
investment was 30.93 which started falling from the subsequent year. At the end, in the year
ending March 2016, the return on investment was 25.93. From the given data it can be noted that
the overall efficiency of the company started decreasing from the year ending March 2014. The
company is not able to utilize its long term funds effectively.

Return on Equity:

Particulars
Return on Equity

Mar 12
32.82

Mar 13
34.70

Mar 14
35.29

Mar 15
32.77

Mar 16
30.17

Return on Equity
36
35

34.7

35.29

34
32.82
33

32.77

32
31

30.17

30
29
28
27
Mar '12

Mar '13

Mar '14

Mar '15

Mar '16

Analysis:
The above data shows that the return on equity was 342.82 in the year ending March 2012. It
increased to 34.70 in the next year. From the year ending March 2014, the return on equity shows
a downward trend as it falls from 35.29 to 32.77 in the subsequent year and from 32.77 to 30.17
in the next year. It is noted that owners funds are not utilised properly to increase firms
profitability.

Fixed Assets Turnover Ratio:

Particulars
Sales
Fixed Assets

Mar 12
Mar 13
Mar 14
Mar 15
Mar 16
----------------------------- in Crore ---------------------------41,809.82
46,712.62
48,741.8
49,964.82
51,582.45
1,19,621.5
1,37,641.5
1,56,316.2
1,73,188.8 1,78,410.9

Fixed Assets

35.0%

33.9%

31.2%

28.8%

28.9%

Turnover Ratio

Fixed Assets Turnover Ratio


40.00%
35.00%

35.00%

30.00%

33.90%
31.20%

25.00%

28.80%

28.90%

Mar '15

Mar '16

20.00%
15.00%
10.00%
5.00%
0.00%
Mar '12

Mar '13

Mar '14

Analysis:
The above table that the Fixed asset turnover ratio is declining from the year ending March 2012
to year ending March 2015 from 35.0% to 28.8%. In the year ending March 2016 it was steady at
28.9%. This indicates that fixed assets are not effectively utilised by the company.

Debtors Turnover Ratio:


Particulars
Sales
Debtors
Debtors Turnover
Ratio

Mar 12
Mar 13
Mar 14
Mar 15
Mar 16
----------------------------- in Crore ---------------------------41,809.82
46,712.62
48,741.8
49,964.82
51,582.45
12,002.0
13,957.6
24,392.1
19,820.7
19,198.4
3.48
3.35
2.0
2.52
2.69

Debtors Turnover Ratio


4.00
3.50
3.00

3.48

3.35

2.50

2.52

2.00

2.69

2.00

1.50
1.00
0.50
Mar '12

Mar '13

Mar '14

Mar '15

Mar '16

Analysis:
The above table shows that Debtors turnover ratio has ups and downs in its 5 year cycle. The
Debtors turnover ratio was 3.48 in the year ending March 2012 which decreased till the year
ending March 2014 from 3.48 to 2.0. From the year ending March 2014, the Debtors turnover
ratio started increasing from 2.0 to 2.52 in the next year and 2.52 to 2.69 in the next consecutive
year. This indicates that from the past 3 years the company is able to convert its debtors into cash
properly. In the starting years there was a downfall may be because of lenient credit terms.

Earnings Per Share (EPS):

Particulars
Earnings Per Share

Mar 12
8.45

Mar 13
10.09

Mar 14
11.05

Mar 15
12.0

Mar 16
12.26

Earnings Per Share


14
12
10
8.45

12.05

12

12.26

Mar '14

Mar '15

Mar '16

10.09

8
6
4
2
0
Mar '12

Mar '13

Analysis:
The above table shows growth in Earnings Per Share from the year ending March 2012 to year
ending March 2016 from 8.45 to 12.26. The table shows increase in Earnings Per Share which
indicates rise in profitability.

Dividend Payout Ratio:

Particulars
Dividend Payout
Ratio

Mar 12
56.22

Mar 13
54.53

Mar 14
53.67

Mar 15
51.84

Mar 16
69.01

Dividend Payout Ratio


80
69.01

70
56.22
60

54.53

53.67

51.84

Mar '13

Mar '14

Mar '15

50
40
30
20
10
0
Mar '12

Mar '16

Analysis:
The table shows that the Dividend Payout Ratio was 54.22 in the year ending March 2012 which
keeps on decreasing in the next consecutive years from 56.22 to 51.84 till the year ending March
2015. In the year ending March 2016, it showed a sudden growth and it was 69.01. This indicates
that in the last financial year company had declared high dividend to its shareholders.

FINDINGS:

Current Ratio and Quick ratio are having steady growth over the years but in the year

ending March 2016, both shows a downfall in growth.


Gross Profit Ratio and Net Profit Ratio shows positive growth over the years which
indicated efficiency in operations.

Debt Equity Ratio shows decline in its growth which indicates that the financial leverage

of the company is low.


From Return on Investment and Return on Equity, it was find out that the company is not

making proper utilisation of its funds.


Debtors Turnover Ratio shows a good progress in the recent years.
Creditors Turnover Ratio shows various ups and downs but it is still trying to make a

steady growth.
Earnings Per Share of the company is having positive growth over the years.
In the last financial year 2016, the Dividend Payout Ratio of the company had increased
gradually which indicates that the company is trying to fulfil its shareholders demand of
high dividend.

CONCLUSION:
Ratio analysis helps to analyse the financial statements of the company. It helps to interpret the
data and take the necessary decisions. Ratio analysis helps to judge the financial position of
various companies. There can be comparison between the companies with the help of ratio
analysis. Also the company should take measures to increase their sales and utilize its assets
effectively. Optimum utilization of resources will help the company to get more profits.
Maintenance of liquid assets will definitely help the company in facing the unexpected
situations. Market share should be increased.

Bharti Airtel Ltd (BHARTI IN) - Dividend Summary


In Millions of INR except Per Share
12 Months Ending
Dividends per Share
Dividends per Share - 5 Yr Geo Growth
Dividend Yield
Dividend Payout Ratio
Cash Dividend Coverage
Dividend Right Parity

FY 2012
03/31/2012
1.00

0.30
6.63
15.09
1.00

FY 2013
03/31/2013
1.00

0.34
7.45
13.42
1.00

FY 2014
03/31/2014
1.80
12.47
0.31
10.90
9.17
1.00

FY 2015
03/31/2015
2.22
17.29
0.87
6.72
14.88

FY 2016
03/31/2016
1.36
6.34
0.63
7.20
13.88

Dividends Paid
Total Cash Preferred Dividends
Total Cash Common Dividends
Trailing 12M Preferred Dividends
Trailing 12M Common Dividends
Trailing 12M Dividends Per Share

-4,414.0
0.0
3,798.0
0.0
3,798.0
1.00

-3,806.0
0.0
3,798.0
0.0
3,798.0
1.00

-3,798.0
0.0
7,195.0
0.0
7,195.0
1.80

-13,713.0
0.0
8,874.0
0.0
8,874.0
2.22

-8,875.0
0.0
5,436.0
0.0
5,436.0
1.36

Source: Bloomberg

Bharti Airtel Ltd (BHARTI IN) - Benchmark


In Millions of INR except Per Share
12 Months Ending
Return on Common Equity
S&P BSE SENSEX Index
Return on Capital
S&P BSE SENSEX Index
Operating Margin
0 S&P BSE SENSEX Index
Price/EPS
S&P BSE SENSEX Index
Price/Book
S&P BSE SENSEX Index
Periodic EV to Trailing 12M
EBITDA
S&P BSE SENSEX Index
Net Debt/EBITDA
S&P BSE SENSEX Index
Source: Bloomberg

CY 2011
12/31/201
1
12.25
17.68
11.00
9.85
18.77
15.94
22.77
16.36
2.64
2.72

CY 2012
12/31/201
2
9.84
16.87
9.42
8.70
14.82
14.85
23.63
18.33
2.22
3.07

CY 2013
12/31/201
3
10.92
16.24
10.18
9.42
18.59
14.77
19.79
18.49
1.98
2.88

CY 2014
12/31/201
4
18.21
15.28
16.06
7.94
21.54
15.33
10.68
22.44
1.80
3.36

CY 2015
12/31/201
5
9.28
15.41
8.51
7.49
21.29
17.03
18.03
20.89
1.61
3.14

10.39
11.55
1.04
2.00

9.12
12.86
0.94
2.12

8.27
13.70
0.57
2.42

8.84
15.64
0.78
2.40

8.31
15.89
2.04
2.92