a satish kale sip

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D E C L A R A T I O N

I hereby declare that this project report entitled FUNDAMENTAL EQUITY

ANALYSYS OF IDEA CELLULAR AND BHARTI AIRTELsubmitted by me to the

college name is original work undertaken by me and it is not submitted to any other

University or Institution for the award of any degree / diploma / certificate or

published any time before. The source of material & data used in this study have

been duly acknowledge.

Date:

Place:


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ACKNOWLEDGEMENT

The successful completion of any task would be put incomplete, without the mentionof all those people who made it possible, whose constant guidance and

encouragement crowns the effort with success.I would like to convey my sincere

acknowledgement to Dr. H.O.D. of \\\\\\\ for giving me an opportunity to carry out

this project.

I am very much thankful to Mr. Durgesh N.Anokar ( Sharekhan

Business Partner ) and all the staff of for their constant support throughout this

project work.

Satish Eknath Kale


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INDEX

1

Sr. No Topics Page No.

Chapter 1 Introduction 5

Chapter2 Company Profile 7

2.1 Ob ective of Stud 9

2.2 Scope of the Study 10

2.3 Research Methodology 11

2.4 Limitation of the study 13

Chapter 3 Theoretical Backround

3.1 EQUITY ANALYSIS 14

Chapter 4 IDEA & AIRTEL Introduction 25

4.1 Balance Sheet 26-27

4.2 P & L A/cc 28-29

Chapter 5 Data analysis and Interpretation of the data

5.1 Analysis and Interpretation 31

Chapter 6 Findings 35

Chapter 7 Conclusion 36

Chapter 8 Recommendation and Suggestion 37

Chapter 9 Bibliography 38


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INTRODUCTION

A member of the Bombay Stock Exchange for the last 3 generations and serving investors since

1922, SSKI is a member of the National Stock Exchange, the Inter-connected stock exchange and a

depository participant registered with both NSDL & CDSL. SSKI made its foray into institutional

broking and corporate finance 19 years ago. Mr. Shripal Morakhia, chairman of the SSKI group

turned into a professional outfit and established the group as the pioneer of the investment research

in the Indian market. The SSKI group of companies is distributed in to four such divisions and they

are as follows:-

SSKI Investors Services Ltd.(Sharekhan)

S.S. Kantilal Ishwarlal Securities Pvt. Ltd.

SSKI Corporate Finance.

I dream Productions.

Sharekhan falls under the umbrella of S.S. Kantilal Ishwarlal Securities Pvt. Ltd (SSKI). Thus

becoming the leading domestic player in Indian institutional business. Sharekhan has more than $1

billion of private equity deals.

SSKI has been voted as Top Domestic Brokerage House in the research category as well as

derivatives, depository services, commodities trading on the MCX & NCDEX and most

importantly, investment advice tempered by eighty years of broking experience. Sharekhan is

known for its research and it big share of its profit on research.


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E-Broking

Electronic broking is a means of buying and selling shares on the stock exchange

electronically i.e. through the internet. The speed of transaction, confidentiality about the

prices and ease of settlement in the paperless mode should be good reason for the retail

investors to jump on the net. Online share trading is perfect combination of the medium of

the net catering to real life concept. Given the trading is all about having access to multiple

information sources from the organizations performance to the industrial and economical

scenarios as well as processing the analytical tools to process this information, the net really

is the perfect solution to investor needs.


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ORGANIZATIONAL PROFILE

Profile Of The Company

Name of the company : Share khan ltd.Year of Establishment : 1925Headquarter : Share Khan SSKI

A-206 Phoenix HousePhoenix Mills CompoundLower ParelMumbai-Maharashtra, INDIA- 400013

Nature of Business : Service Provider

Services : Depository Services, Online Servicesand Technical Research

Number of Employees : Over 3500Website : www.sharekhan.comSlogan : Your Guide to The Financial Jungle.

ACHIEVEMENTS OF SHAREKHAN: A Rated among the top 20 wired companies along with Reliance, HUJl, Infosys, etc

by Business Today, January 2004 edition.

Awarded Top Domestic Brokerage House four times by Euro money and Asia

money.

Pioneers of online trading in India amongst the top 3 online trading websites from

India. Most preferred financial destination amongst online broking customers.

Winners of Best Financial Website award.

Indias most preferred brokers within 5 years. Awaaz customers Award 2005.


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Future Plans: 2, 00,000 plus retail customers being serviced through centralized call centers/

web solutions.

Branches / Semi branches servicing affluent / aggressive traders through high skill

financial advisor.

250 independent investment managers/ franchisee servicing 50,000 highly valued

clients.

New initiatives Portfolio management Services and commodities trading.

Vision:To be the best retail brokering Brand in the retail business of stock market.

Mission:To educate and empower the individual investor to make better investment decisionsthrough quality advice and superior service.

Share khan is infect:

Among the top 3 branded retail service provider.

No. 1 player in the online business.

Largest network of branded broking outlets in the country serving more than 7,

00,000 clients.

A share khan outlet offers the following services:

Online BSE and NSE executions (through BOLT and NEAT terminals)

Free access to investment advice from share khans Research team.

Share khan value line (a monthly publication with reviews of recommendations

stocks to watch out for etc.)

Daily research reports and market review (High Noon & Eagle Eye)

Pre-market Report

Daily trading calls based on Technical Analysis Cool trading products (Daring Derivatives and Market Strategy)

Personalized Advice

Live Market Information

Depository Services: Demat & Remat Transactions

Derivatives Trading (Futures and Options)

Commodities Trading

IPOs & Mutual Funds Distribution


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Internet-based Online Trading: Speed Trade

OBJECTIVES OF THE STUDY:

Primary objective:

1.To do comparative study of Telecom Sector with special reference to

Bharti Airtel Idea Cellular

Secondary objectives:

1. To study the movement of related stock prices.

2. To study various tools used in Fundamental Analysis to help investors.

3. To analyze Telecom Sector taking into consideration its current status & future prospects.

4. To Study the fundamental analysis & its importance for taking investment decision.

SWOT Analysis

A scan of the internal and external environment is an important part of the strategic planningprocess. Environmental factors internal to the firm usually can be classified as strengths (S) orweaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T).Such an analysis of the strategic environment is referred to as a SWOT analysis. SWOT analysis ofthe Indian automobile sector gives the following points:

Strengths

Large domestic market

Sustainable labor cost advantage

Competitive auto component vendor base Government incentives for manufacturing plants

Strong engineering skills in design etc

Weaknesses

Low labor productivity

High interest costs and high overheads make the production uncompetitive

Various forms of taxes push up the cost of production

Low investment in Research and Development

Infrastructure bottleneck


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Opportunities

Commercial vehicles: SC ban on overloading Heavy thrust on mining and construction activity

Increase in the income level

Cut in excise duties

Rising rural demand

Threats

Rising input costs

Rising interest rates

Cut throat competition

SCOPE OF THE STUDY

1. It includes Fundamental Analysis and various tools used in it.

2. Fundamental analysis helps to understand the basics of financial statements and gives the tools that help

to make worthwhile investments.

3. It is a process of looking the business at the basic or fundamental financial level. This analysis

examines ratios of a business to determine its financial health and value of its stock.

4. The scope of Project extends to the study of 2 players of Indian Telecom Sector.

5. Financials of these companies relevant to the last five years.


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RESEARCH

METHODOLOGY

Research has its special significance in solving various operational and planning problems of

business and industry. Research methodology is a way to systematically analyze the research

problem.

Development of Working Hypothesis:

The hypothesis could be developed by discussing with the consulting department heads and guides

about this exploratory research and reach to the conclusion that the data is to be collected by

personal interaction with the clients, asking them about their investment planning and their need for

financial advisory service from SHAREKHANLtd.

First of all are they aware of tax and investment planning or not and then analyzing the findings to

reach to the objectives of research.

Collection of Data

This research is solely based on primary research done by means of questionnaires targeted to

respondents who primarily belong to the business and service sector.It is very essential in the research process to know the accuracy of the findings which depends on

how systematically the study has been carried out so that it can make sense.

I have executed the project after prior discussion with our guide and structured in the following

steps:


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a. Preparation of a questionnaire

b. The focal point of the designing the questionnaire was to comprehend the current

investment scenario with respect to tax planning part.c. This questionnaire was primarily aimed to respondents who belong to the service and

business class people

d. The questionnaires were discussed through personal interface with the respondents

The data has been solely based on primary research done by interviewing the customers who

primarily belong to the business and the service sector. The data is essential for the company so that

on that basis they would do asset allocation.

The main research has been done by collecting data from different websites and books. This can be

a benchmark against which the findings can be tested.

1. Primary data

Observational Method.

2. Secondary Data

By Internet

RESEARCH APPROACH

Out of 2 ways of research approaches

1. Observation research.

3. Focus Group research

Sampling Plan:-

Sampling size : 60

Field Work area : Khamgoan City

Research Design Descriptive Type

Methods of Data CollectionPrimary and Secondary

Sample Size2 Telecom Sector Companies


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LIMITATION

There is no activity without limitations, the main Limitation has faced during project research are as

follows:-

The research has been carried on time span of one months.

The research is totally based on the personal opinion of the respondents which may varydepending upon their personal view.

1.) The Sample Size being taken for drawing a conclusion was too small to get an accurate

result.

2)Changing the Mentality of people for investing in a particular Financial Product is a very difficult

task.


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Theoretical prospective

Definition of Fundamental Analysis :

Fundamental analysis is a method used to determine the value of a stock by analyzing the financialdata that is 'fundamental' to the company. That means that fundamental analysis takes intoconsideration only those variables that are directly related to the company itself, such as itsearnings, its dividends, and its sales. Fundamental analysis does not look at the overall state of themarket nor does it include behavioral variables in its methodology. It focuses exclusively on thecompany's business in order to determine whether or not the stock should be bought or sold.

EQUITY ANALYSIS

Effective and efficient investment decisions should be based on actual movement of share pricemeasured both in money & percentage term.Decisions like whether one should buy or sell when trading inthe share market is a difficult task to do. It requires split-hair analysis of the market. To do so one also needsto have excellent understanding of the market.Equity analysis decides the stance one would take in the sharetrading industry. Finding out the highs and lows in the market and analyzing the equity is of utmost importance

before making any sort of investment. The equity analysis does not discuss how to buy & sell shares,but does discuss a method which enables the investor to arrive at buying & selling decision. Equityanalysis forms an integral part of the share trading experience. The financial analysts always need tools toevaluate the efficiency & performances of any business unit at the time of investment. In EquityAnalysisanticipated growth, calculations are based on considered FACTS & not on HOPE. Equity

analysis is basically a combination of two independent analyses, namely fundamental analysis &Technical analysis. The subject of Equity analysis, i.e. the attempt to determine future share pricemovement & its reliability by references to historical data is a vast one, covering many aspect fromthe calculating various FINANCIAL RATIOS, plotting of CHARTS to extremely sophisticatedindicators.

The fundamental analysis is useful in long term investmentdecision. In Fundamental analysis a companys goodwill, its performances, liquidity, leverage,

turnover, profitability & financial health was checked & analysis with the help of ratio analysis forthe purpose of long term successful investment.

Technical analysis refers to the study of market generated data like prices & volume todetermine the future direction of prices movements. Technical analysis mainly seeks to predict the

short term price travels. The focus of technical analysis is mainly on the internal market data, i.e.prices & volume data. It appeals mainly to short term traders.It is the oldest approach to equity investment dating back to the late 19th century.

Assumptions for Equity Analysis:

1. Works only in normal share-market conditions with great reliability, it also worksin abnormal share-market conditions, but with low reliability.


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2. Equity analysis is purely based on the INVESTMENT PHILOSOPHY, so the investment objecthas vital importance associated to return along with risk.

3. Cash management gets the magnitude role, because the scenario of equity analysis is revolvingaround the term money.

4. Portfolio management, risk management was up to the investor s knowledge.5. Capital market trend is always a friend, whether it is short run or long run.

6. You are buying stock & not companies, so don t be curious or panic to do postmortem ofcompanies performances.

7. History repeats: investors & speculators react the same way to the same types of eventshomogeneously.

8. Capital market has a typical market psychology along with other issues like; perceptions, thecrowd vs. the individual, tradition s & trust.

9. An individual perceptions about the investment return & associated risk may differ from

individual to individual.

10. Although the equity analysis is art as well as sciences so, it also has some exceptions.

Over a period of more than two decades the Indian Automobile industry has been driving its owngrowth through phases. With comparatively higher rate of economic growth rate index against thatof great global powers, India has become a hub of domestic and exports business. The automobilesector has been contributing its share to the shining economic performance of India in the recentyears.

To understand this industry for the purpose of investment we need to analyze it by following

two approaches:

1) Fundamental Analysis

2) Technical Analysis

Fundamental Analysis.

Fundamental analysis is the study of economic, industry and company conditionsin an effort to determine the value of a company s stock. Fundamental analysis typicallyfocuses on key statistics in company s financial statements to determine if the stock priceis correctly valued.

Most fundamental information focuses on economic, industry and company statistics.

The typical approach to analyzing a company involves four basic steps :

1 Determine the condition of the general economy.


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2 Determine the condition of the industry.3 Determine the condition of the company.4 Determine the value of the company s stock

Market potential

A set of consumers who profess some level of interest in a designed market

offer.

Classic Demat a/c :

Transferring fund

Managing your profile

Buying share

Selling share

Digital contract

The transaction cycle for purchasing and selling shares online is depicted below:

Client

Member/

Broking

firm.

Stock Exchange

(BSE / NSE)

Member/

Broking

firm.

Client

Transaction Cycle


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Terms Using Share Trading

Bringing together under one site all the relevant factors to enable an informed investment is

what online trading is all about. There are several terms which are commonly used for online share

trading :

1. D Mat a/c This is a account where dematerialization takes place. Dematerialization is the

process by which physical certificates of an investor are converted to an equivalent number of

securities form and credited into the investors account with his/her DP.

2. DPA depository participant is an agent of the depository through which it interfaces with the

investor. DP can offer depository services only it gets proper registration from SEBI.

3. DepositoryA depository is an organisation which holds securities of investor in electronic form

at request at request of the investor through a registered repository participant. It also provides

services related to transactions in securities.

4. Saving a/c - This is a regular bank a/c which is linked to D Mat a/c and trading a/c. Required

amount of money is used for trading from saving a/c.

5. Trading a/c This is a a/c through which actual trading i.e. buying and selling takes place. In

online share trading all three accounts are interlinked.

SAVINGACCOUNT

TRADINGACCOUNT

D-MATACCOUNT


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6. Market order- Market order is an order to buy or sell stock at the current market price. Unless

you specify otherwise, your broker will enter your order as a market order.

7.. Order- Investors have several options when it comes to placing an order to buy or sell the

securities. For example, whether you place an order directly with your broker or trade online, you

can instruct your broker to buy or sell at a specified price. Or you can place an order that is good forone day only or for an extended period.

8. Stop order- A stop order is an order to buy to sell a stock once the price of the stock reaches the

specified price, know as stop price. When the specified price is reached, your stop order becomes a

market order.

Buy stop order- Investors typically uses a stop order when buying stock to limit a loss or protect a

profit on short sell. The order is entered at a stop price that is always above the current price.

9.Sell Stop order- A sell stop order helps the investors to avoid further losses or to protect a profit

that exists if the stock price continues to drop. A stop order to sell is always placed below the

current market price.

10. Short Sell- A short sell is generally the sale of a stock you do not own. Investors who sell short

believe the price of the stock will fall. If the price of the stock drops, you can buy the stock at lower

price and make the profit. If the price of the stock rises and you buy it back later at higher price, you

will incur a loss.

Account Opening

To avail the services of depository one requires opening an account with any of the depository

participants. The e-invest account is an account which allows a customer electronic trading on the

exchange. Through this unique three in one trading every customer opening an e-invest account

gets a bank saving account.


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FORM

SUBMISSIONSCRUTINY

SEGERATE

OPEN A/C OR

REJECT

BANK VALID

FORM

INTIMATES

CPU

OPEN A/C

OR REJECT DP


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Process for Buying / Selling Online

Log on to www.sharekhan.com

Click to trading zone put in your user login andpassword.

Fill in the features on the buy / sell screen and select the

buy / sell option.

You will be automatically linked to bank site to place a

hold.

Log on to your net banking a/c put in your net banking

and client id and password.

Place hold of the required amt. (system will

automatically tell you calculation of the total amt. to be

placed on hold).


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Type in your password and confirm order.

Order is accepted and goes to NSE.

Trade is executed and you get an email confirmation.

To exit the trading zone click on log out.


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Fundamental Analysis consist of following

Study of Balance sheet

Study of Profit and Loss a/c

Study of Ratios

Balance Sheet :

A financial statement that summarizes a company's assets, liabilitiesand shareholders' equity at a specific point in time. These three balance sheet segmentsgive investors an idea as to what the company owns and owes, as well as the amountinvested by the shareholders.

The balance sheet must follow the following formula:Assets = Liabilities + Shareholders' Equity

Each of the three segments of the balance sheet will have many accounts within itthat document the value of each. Accounts such as cash, inventory and property are onthe asset side of the balance sheet, while on the liability side there are accounts such asaccounts payable or long-term debt. The exact accounts on a balance sheet will differ bycompany and by industry, as there is no one set template that accurately accommodatesfor the differences between different types of businesses.

It's called a balance sheet because the two sides balance out. This makes sense: acompany has to pay for all the things it has (assets) by either borrowing money(liabilities) or getting it from shareholders (shareholders' equity).

The balance sheet is one of the most important pieces of financial informationissued by a company. It is a snapshot of what a company owns and owes at that point intime. The income statement, on the other hand, shows how much revenue and profit acompany has generated over a certain period. Neither statement is better than the other -rather, the financial statements are built to be used together to present a complete pictureof a company's finances.

The balance sheet shows the financial condition of a business at a given point oftime. As per the Companies Act, the balance sheet of a company shall be in either theaccount form or the report form.

Liabilities AssetsShare Capital Fixed AssetsReserves and Surplus InvestmentsSecured loans Current assets , loans & advancesUnSecured loans Miscellaneous expenditureCurrent liabilities and provisions


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Liabilities

Liabilities, defined very broadly, represent what the firm owes others. A liabilityarises when a firm receives benefits or services and , in turn, promises to pay cash orprovide goods and services in future.

The format prescribed in the Companies Act classifies liabilities as follows : -

Share Capital: Share capital includes equity capital and preference capital. Equitycapital represents the contribution of equity shareholders who are the owners of the firm.Equity capital, being the risk capital, carries no fixed rate of dividend. Preference capitalrepresents the contribution of preference shareholders and the dividend rate payable on itis general fixed.

Reserve and Surplus: Reserve and Surplus comprise retained earnings as well as non earningsitems like share premium and capital subsidy. In common practice forcompanies to transfer from the profit and loss account to various reserve accounts. This

process is called appropriation.

Secured loan: Secured loan are loans that are secured by a charge on the assets of thefirm. The charge may be created in the form of pledge or hypothecation of movableassets such as inventories and debtors and or in the form of mortgage of immovableassets such as land, building, and plant and machinery.

Unsecured loans: in contrast to secured loans, unsecured loans are loans which are notsecured by a charge on the assets of the firm.

Current liabilities and Provisions: current liabilities and provisions represent

obligations that are expected to mature within a year. Current liabilities include itemssuch as bills payable, sundry creditors, interest accrued etc. and provisions include itemssuch as provision for taxes, dividend, and other exp.

AssetsAssets are resources which are expected to provide a firm with future economic benefits,by way of higher cash inflows or lower outflows. Assets are classified as follows underthe Companies Act:

Fixed Assets: fixed assets, also called non current assets, are assets that are expected toproduce benefits for more that one year. These assets may be tangible or intangible.Tangible fixed assets include items such as land, buildings, plant and machinery,

furniture. Intangible assets include goodwill, patents, and copyrights.

Investment: investments represent financial securities owned by the firm. They aredivided into two categories, long term investment and current investment.

Current Assets: this category consists of cash and other assets which get converted intocash or which result in cash savings, during the operating cycle of the firm. The majorcomponents of current assets, loans and advances are: inventories, debtors, cash and bankbalances, other current assets and loans and advances.


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Miscellaneous Exp : this comprise of items such as preliminary exp, discount allowed onissue of securities, interest paid out of capital during construction, and developmentexpenditure to the extent not written off or adjusted.

Profit and Loss a/c :A financial report that - by summarizing revenues and expenses, and showing the

net profit or loss in a specified accounting period - depicts a business entity s financialperformance due to operations as well as other activities rendering gains or losses. Alsoknown as the "profit and loss statement" or "statement of revenue and expense".

The income statement is the most analyzed portion of the financial statements.It displays how well the company can assure success for both itself and its shareholdersthrough the earnings from operations.

The companies act has prescribed a standard form for the balance sheet, but nonefor the profit loss account. However, the companies act does require that the informationprovided should be adequate to reflect a true and fair picture of the operations of thecompany for the accounting period.

Structure of Profit and Loss a/c

Income

Sales

Expenditure

Material and other expenditure

Interest

Depreciation

Profit before tax

Provision for taxProfit after tax

While a single step profit and loss account aggregates all revenues and expenses,a multi step profit and loss account provides disaggregated information. Further, insteadof showing only the final profit measure, the profit after tax figure, it presents proftmeasures at intermediate stages as well.


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Company Introduction

Industry Specific Index

Industry specific index also called as sectoral index are those indices, which represent a specificindustry sector. All stocks in a sectoral index belong to that sector only. Hence an index like theBSE auto index is made of auto stocks. Sectoral Indices are very useful in tracking the movement

and performance of particular sector.

BSE Auto Index comprises all the major stocks in the BSE Index

.

Last Price Market Cap.(Rs. cr.)

SalesTurnover

Net Profit Total Assets

Bharti Airtel 411.15 156,135.45 38,015.80 7,716.90 41,776.12Idea Cellular 85.40 28,214.08 15,389.00 844.60 17,983.66

Reliance Comm 93.60 19,319.29 11,989.19 -757.99 74,977.17Tata Comm 220.40 6,281.40 3,409.00 160.16 9,919.69


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COMPANY ANALYSIS ( Idea Celluler & Bharti Airtel )

Idea CellularBSE: 532822 | NSE: IDEA | ISIN: INE669E01016 |

Balance Sheet of Idea Cellular------- in Rs. Cr. -------------------

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of FundsTotal Share Capital 2,742.53 2,592.86 2,635.36 3,100.10 3,299.84Equity Share Capital 2,259.53 2,592.86 2,635.36 3,100.10 3,299.84Share Application Money 0.00 0.00 3.76 18.23 44.45Preference Share Capital 483.00 0.00 0.00 0.00 0.00Reserves -1,574.00 -413.71 906.91 8,176.09 8,112.95

Revaluation Reserves 0.00 0.00 0.00 0.00 0.00Networth 1,168.53 2,179.15 3,546.03 11,294.42 11,457.24Secured Loans 1,470.75 3,539.77 5,454.43 5,564.93 5,988.61Unsecured Loans 1,444.85 710.74 1,060.33 2,014.43 537.81Total Debt 2,915.60 4,250.51 6,514.76 7,579.36 6,526.42Total Liabilities 4,084.13 6,429.66 10,060.79 18,873.78 17,983.66



Application Of FundsGross Block 3,975.11 8,229.61 12,791.22 15,562.75 22,834.40Less: Accum. Depreciation 1,157.63 2,637.18 3,123.83 4,739.86 7,907.34Net Block 2,817.48 5,592.43 9,667.39 10,822.89 14,927.06Capital Work in Progress 95.91 506.52 941.13 1,721.82 462.58Investments 307.03 13.83 569.93 4,928.81 2,755.13Inventories 8.81 17.91 27.62 42.73 46.70Sundry Debtors 90.82 152.48 198.59 329.59 430.12Cash and Bank Balance 40.12 122.76 147.67 140.86 129.13Total Current Assets 139.75 293.15 373.88 513.18 605.95Loans and Advances 1,408.64 560.82 950.88 2,278.21 3,533.15Fixed Deposits 88.97 1,696.97 349.38 2,203.57 151.31Total CA, Loans & Advances 1,637.36 2,550.94 1,674.14 4,994.96 4,290.41Deffered Credit 0.00 0.00 0.00 0.00 0.00Current Liabilities 762.24 2,180.21 2,709.98 3,496.04 4,313.76Provisions 11.39 53.84 81.82 98.65 137.76Total CL & Provisions 773.63 2,234.05 2,791.80 3,594.69 4,451.52Net Current Assets 863.73 316.89 -1,117.66 1,400.27 -161.11Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00Total Assets 4,084.15 6,429.67 10,060.79 18,873.79 17,983.66

Contingent Liabilities 213.92 1,236.57 2,308.87 2,279.41 1,960.75Book Value (Rs) 3.03 8.40 13.44 36.37 34.59


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Bharti Airtel

BSE: 532454 | NSE: BHARTIARTL | ISIN: INE397D01024 | Telecom- Service

Balance Sheet of Bharti Airtel ---------- in Rs. Cr. -------------------



Sources Of FundsTotal Share Capital 1,893.88 1,895.93 1,897.91 1,898.24 1,898.77Equity Share Capital 1,893.88 1,895.93 1,897.91 1,898.24 1,898.77Share Application Money 12.13 30.00 57.63 116.22 186.09Preference Share Capital 0.00 0.00 0.00 0.00 0.00Reserves 5,437.42 9,515.21 18,283.82 25,627.38 34,650.19Revaluation Reserves 2.13 2.13 2.13 2.13 2.13Networth 7,345.56 11,443.27 20,241.49 27,643.97 36,737.18

Secured Loans 2,863.37 266.45 52.42 51.73 39.43Unsecured Loans 1,932.92 5,044.36 6,517.92 7,661.92 4,999.49Total Debt 4,796.29 5,310.81 6,570.34 7,713.65 5,038.92Total Liabilities 12,141.85 16,754.08 26,811.83 35,357.62 41,776.10



Application Of FundsGross Block 17,951.74 26,509.93 28,115.65 37,266.70 44,212.53Less: Accum. Depreciation 4,944.86 7,204.30 9,085.00 12,253.34 16,187.56Net Block 13,006.88 19,305.63 19,030.65 25,013.36 28,024.97

Capital Work in Progress 2,341.25 2,375.82 2,751.08 2,566.67 1,594.74Investments 719.70 705.82 10,952.85 11,777.76 15,773.32Inventories 17.74 47.81 56.86 62.15 27.24Sundry Debtors 1,076.17 1,418.52 2,776.46 2,550.05 2,104.98Cash and Bank Balance 201.81 239.11 200.86 153.44 54.89Total Current Assets 1,295.72 1,705.44 3,034.18 2,765.64 2,187.11Loans and Advances 1,937.54 3,160.02 5,103.13 5,602.83 6,276.12Fixed Deposits 105.61 541.35 302.08 2,098.16 761.86Total CA, Loans & Advances 3,338.87 5,406.81 8,439.39 10,466.63 9,225.09Deffered Credit 0.00 0.00 0.00 0.00 0.00Current Liabilities 6,735.36 9,809.83 12,400.38 13,832.49 12,183.25

Provisions 537.44 1,232.84 1,961.95 634.40 658.75Total CL & Provisions 7,272.80 11,042.67 14,362.33 14,466.89 12,842.00Net Current Assets -3,933.93 -5,635.86 -5,922.94 -4,000.26 -3,616.91Miscellaneous Expenses 7.94 2.66 0.20 0.09 0.00Total Assets 12,141.84 16,754.07 26,811.84 35,357.62 41,776.12

Contingent Liabilities 4,740.34 7,615.04 7,140.59 4,104.25 3,921.50Book Value (Rs) 38.71 60.19 106.34 145.01 96.24


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Profit & Loss a/cc of Idea Cellular



Income

Sales Turnover 11,850.24 9,857.08 6,719.99 4,366.40 2,007.07

Excise Duty 0.00 0.00 0.00 0.00 0.00

Net Sales 11,850.24 9,857.08 6,719.99 4,366.40 2,007.07

Other Income 383.83 401.80 184.17 27.64 5.20

Stock Adjustments 0.00 -0.05 0.00 -1.20 -0.01

Total Income 12,234.07 10,258.83 6,904.16 4,392.84 2,012.26

Expenditure

Raw Materials 0.02 18.92 0.01 4.06 0.04

Power & Fuel Cost 942.27 533.54 224.40 109.46 37.86

Employee Cost 561.17 458.46 332.88 251.43 115.08

Other Manufacturing

Expenses

5,187.63 4,022.86 2,643.43 1,388.33 626.41

Selling and AdminExpenses

1,823.48 1,621.90 974.08 959.34 439.02

Miscellaneous Expenses 91.58 82.76 53.87 38.69 18.22

Preoperative ExpCapitalised

0.00 0.00 0.00 -0.08 -0.04

Total Expenses 8,606.15 6,738.44 4,228.67 2,751.23 1,236.59

Operating Profit 3,244.09 3,118.59 2,491.32 1,613.97 770.47

PBDIT 3,627.92 3,520.39 2,675.49 1,641.61 775.67

Interest 982.44 1,206.35 695.85 478.26 308.25

PBDT 2,645.48 2,314.04 1,979.64 1,163.35 467.42

Depreciation 1,366.61 1,096.72 756.85 563.67 262.88

Other Written Off 184.59 146.13 119.91 108.14 84.66

Profit Before Tax 1,094.28 1,071.19 1,102.88 491.54 119.88

Extra-ordinary items 91.61 15.68 13.97 5.23 8.61

PBT (Post Extra-ord Items) 1,185.89 1,086.87 1,116.85 496.77 128.49

Tax 115.08 85.65 72.50 6.99 2.90

Reported Net Profit 1,053.66 1,001.21 1,044.36 502.06 125.60

Total Value Addition 8,606.12 6,719.52 4,228.66 2,747.16 1,236.54

Preference Dividend 0.00 0.00 0.00 0.00 0.00

Equity Dividend 0.00 0.00 0.00 0.00 0.00

Corporate Dividend Tax 0.00 0.00 0.00 0.00 0.00

Per share data (annualised)

Shares in issue (lakhs) 32,998.38 31,000.95 26,353.61 25,928.61 22,595.27

Earning Per Share (Rs) 3.19 3.23 3.96 1.94 0.56Equity Dividend (%) 0.00 0.00 0.00 0.00 0.00

Book Value (Rs) 34.59 36.37 13.44 8.40 3.03


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Profit & Loss A/cc of Bharti Airtel

Mar 10 Mar 09 Mar '08 Mar '07 Mar

12 mths 12 mths 12 mths 12 mths 12 m

Income

Sales Turnover 38,015.80 35,609.54 34,048.32 25,761.11 17,8

Excise Duty 0.00 0.00 0.00 0.00 0.00

Net Sales 38,015.80 35,609.54 34,048.32 25,761.11 17,8

Other Income 112.90 1,118.46 -1,261.75 104.04 105

Stock Adjustments 7.20 -34.91 5.29 9.05 30.0

Total Income 38,135.90 36,693.09 32,791.86 25,874.20 17,9

Expenditure

Raw Materials 23.30 278.72 286.94 42.90 52.1

Power & Fuel Cost 0.00 0.00 0.00 0.00 0.00

Employee Cost 1,451.20 1,401.66 1,397.54 1,297.88 1,07

Other ManufacturingExpenses 13,558.40 11,882.41 8,627.13 7,339.01 5,01

Selling and Admin Expenses 0.00 6,856.42 9,385.68 5,892.50 4,03

Miscellaneous Expenses 9,634.80 1,482.39 1,409.89 535.46 444

Preoperative ExpCapitalised

0.00 -293.31 -269.25 0.00 0.00

Total Expenses 24,667.70 21,608.29 20,837.93 15,107.75 10,6

Mar '11 Mar '10 Mar '09 Mar '08 Mar

12 mths 12 mths 12 mths 12 mths 12 m

Operating Profit 13,355.30 13,966.34 13,215.68 10,662.41 7,26

PBDIT 13,468.20 15,084.80 11,953.93 10,766.45 7,36

Interest 130.80 283.35 434.16 393.43 282

PBDT 13,337.40 14,801.45 11,519.77 10,373.02 7,08

Depreciation 4,193.70 3,890.08 3,206.28 3,166.58 2,35

Other Written Off 417.90 207.84 178.82 266.07 137

Profit Before Tax 8,725.80 10,703.53 8,134.67 6,940.37 4,59

Extra-ordinary items 0.00 -50.78 -46.15 -60.67 9.92

PBT (Post Extra-ord Items) 8,725.80 10,652.75 8,088.52 6,879.70 4,60

Tax 1,008.90 1,177.87 321.78 632.43 566

Reported Net Profit 7,716.90 9,426.15 7,743.84 6,244.19 4,03

Total Value Addition 24,644.40 21,329.56 20,551.00 15,064.84 10,5

Preference Dividend 0.00 0.00 0.00 0.00 0.00

Equity Dividend 379.80 379.79 379.65 0.00 0.00

Corporate Dividend Tax 60.10 64.55 64.52 0.00 0.00

Per share data (annualised)Shares in issue (lakhs) 37,975.30 37,975.30 18,982.40 18,979.07 18,9

Earning Per Share (Rs) 20.32 24.82 40.79 32.90 21.2

Equity Dividend (%) 20.00 20.00 20.00 0.00 0.00

Book Value (Rs) 115.43 96.24 145.01 106.34 60.1


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Idea Cellular

------------------- in Rs. Cr. -------------------

Mar '10 Mar09 Mar08 Mar07

Investment Valuation Ratios

Face Value 10.00 10.00 10.00 10.00

Dividend Per Share -- -- -- --

Operating Profit Per Share (Rs) 9.83 10.06 9.45 6.22

Net Operating Profit Per Share (Rs) 35.91 31.80 25.50 16.84

Free Reserves Per Share (Rs) 24.53 25.71 2.66 -2.39

Bharti Airtel

Mar '10 Mar '09 Mar '08 Mar '07

Investment Valuation Ratios

Face Value 5.00 5.00 10.00 10.00

Dividend Per Share 1.00 1.00 2.00 --

Operating Profit Per Share (Rs) 35.17 36.65 69.50 56.16

Net Operating Profit Per Share (Rs) 100.11 93.77 179.37 135.73

Free Reserves Per Share (Rs) -- 84.64 121.78 83.18

Bonus in Equity Capital -- 82.49 82.51 82.53


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0.00

10,000.00

20,000.00

30,000.00

40,000.00

2010 2009 2008 2007 2006

Year

SALES

Airtel

Idea

Data Analysis & Interpretation


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0.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

2010 2009 2008 2007 2006

Year

NET PROFIT

Idea

Airte

Rs. In Cr.


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Earning Per Share

2010 2009 2008 2007 2006

IdeaEarning Per

Share (Rs)3.19 3.23 3.96 1.94 0.56

Bharti

Airtel

Earning Per

Share (Rs)20.32 24.82 40.79 32.90 21.27

EPS = Net income-Dividends on PreferredStockOutstanding shares

0

50

2010 2009 2008 20072006

Rs

Year

Earning Per Share

Idea

Bharti Airtel

Rs. In Cr.


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Dividend per Share = Total amt of Dividend

--------------------

Share Outstanding

0

0.5

1

1.5

2

2010 2009 2008 2007 2006

DIVIDEND PER SHARE

Idea

Airtel


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Findings

1. Both giants of Telecom industry shows positive trend in Sales

Revenue over the past 5year. However recession brought hurdles but bothcompanies have potential to grow in future as lots of products are still toadd in their portfolio. The Sale of Bharti Airtel is more than Idea cellularover the past 5 year scenario.

2. The trend shows that Ideas net profit margin is quite little from 2006

to 2008 rising but it falls to 44 Cr. in 2009. While the net profit of Indias

no.1 Telecom Services Bharti Airtel shows a continuous rising from 2006to 2009 but it falls to 1710 Cr. in 2010 onwards. But the future prospectfor both the companys profit is higher.

3 EPS measures the profit available to the equity shareholders per share,that is, the amount that they can get on every share held. Till 2008 both thecompanies had a rising EPS but in 2009and 2010 continuous both of themfall and the effect more on Bharti Airtel and fall in sales results in lowEPS. But as trend shows but Bharti Airtel and Idea Cellular both havepotential so an shareholder expect better in future.

4. Idea Cellular has not declared any dividend for the last several years.The trend shows that Bharti Airtel no paid dividend in 2006 and 2007 but

in 2008 it rising up to Rs. 2 but also falls to Rs.1 in 2009 and 2010.Bharti Airtel has declared an equity dividend of 20.00% amounting to Rs1 per share.Bharti Airtel had last declared a dividend of 20.00% for the year ending

March 2011.


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CONCLUSION

Higher EPS is always better. From the collected annual results anddifferent ratios of the two companies, it is concluded that EPS of

Bharti Airtel is higher than Idea Cellular.

Bharti Airtel has shown highest sales than the Idea Cellular.

Among all the selected top two companies of Telecom sector it is

also found that the investors should buy the shares of Bharti Airterl .

as it will give better returns to them in future


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Recommendations & Suggestions

The investors in market should always look for fundamentalvaluations of the shares they want to invest along with the market

momentum.

The fundamental analyst should know all the current market news forthe company concerned as well as for the sector to which thecompany belongs.

Collect the information about the market because information playsan important role in the movement of share price. Share prices

change with demand and supply in the market.

Invest in different shares and not in single share, always diversify theinvestment. While investing brokers recommendations shouldconsider.


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Bibliography

Books Referred:

Raghu Palat, Fundamental Analysis for investors, vision books pvt.

Ltd., Third edition.

Kothari C. R., Research Methodology

Websites:

www.nseindia.com www.bseindia.com www.financialexpress.com www.moneycontrol.com
http://www.nseindia.com/http://www.bseindia.com/http://www.bseindia.com/http://www.bseindia.com/http://www.nseindia.com/

a satish kale sip

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