FIN317 GROUP PROJECT

Reliance Communication
Anil Dhirubhai Ambani Group

Presentation Content
Content
1. 2. 3. 4. 5. Reliance Communications Over view Ratios Cash Flow News items Conclusion

so
Welcome Everybody
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Reliance communication Ltd. Type Founded Headquarters Public (BSE: RCOM) 2004 Navi Mumbai, India Anil Ambani, Chairman and Managing Director [1], ViceChairman Reliance-ADA Group S. P. Sukula CEO - Personal Business & Director Reliance Telecom Telecommunications CDMA service, GSM service, Broadband Internet Service US$ 4 Billion 33,000 www.rcom.com
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Key people

Industry Products Revenue Employees Website

Reliance Communications

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.

Indias fastest customer additions since launch

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Price List
Date Open 151 135 High 157 136 Low 141 131 Close 157 132 Change

16-Mar-09
09-Mar-09 02-Mar-09 24-Feb-09 16-Feb-09

152
152 178

153
158 182

143
150 170

143
157 170

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Liquidity ratios
Mar ' 08
Current ratio Quick ratio 1.65 1.63

Mar ' 07
1.87 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 Long term debt / Equity Total debt/equity Fixed assets turnover ratio Mar ' 07

0.48
0.81 0.77

0.67
0.70 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 COMMUNICATIONS
Ratios
Per share ratios EPS (Rs) Dividend per share Mar ' 08 12.53
)

(Rs crore) Mar ' 07 9.43

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 Operating margin (%) Gross profit margin (%) 41.73 29.26 17.45 11.81 Mar ' 07 43.21 28.82 18.63 11.16

Net profit margin (%)

Return on long term funds (%)

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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 11.74 10.96 8.43 29.21 10.41 9.65 5.01

Return on equity
Return on capital employed Interest coverage ratio

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Cash flow
Mar ' 08 Profit before tax Net cash flow-operating activity Net cash used in investing activity Net cash used in fin. activity Net inc/dec in cash and equivalent Cash and equivalent begin of year Cash and equivalent end of year
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Mar ' 07 2,420.85

2,604.09

2,982.80
-11,263.87 6,234.75 -2,047.74 2,240.40 192.66

10,469.12
-4,883.86 4,645.92 10,231.18 -10,162.73 68.45

COMPARISON AS ON 20-03-09
Company Name Reliance Comm Bharti Airtel Idea Cellular Tata Comm MTNL Last Price

153

Market Cap. Sales (Rs. cr.) Turnover 31,734 14,792

Net Profit

Total Assets

2,586

45,126

560

106,595

25,761

6,244

26,811

46
456 64

14,353
12,960 4,050

6,719
3,283 4,722

1,044
304 406

10,060
6,941 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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