ACCOUNTING FOR BUSINESS

ANNUAL REPORT ANALYSIS OF BHARTI AIRTEL

Under the Guidance of:

Bhurpendra Hada

Submitted by:
GROUP NO. 2
Amol Mathur (PGFC2104)
Anoushka Agnihotri (PGFC2106)
Ayushi Agarwal (PGFC2108)
Divya Singhal (PGFC2112)
Garima Vijay (PGFC2114)

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 Acknowledgement

We owe a great many thanks to a great many people who helped and supported us during this Project.

We all are thankful to Bhupendra Hada Sir for conscientious guidance and encouragement to accomplish this
assignment.

We extend our gratitude to Jaipuria Institute of Management for giving us this opportunity.

We would like to thank our friends who helped us a lot in gathering different information, collecting data,
and guiding us from time to time in making this project, despite of their busy schedules, they gave us
different ideas in making this project unique.

Thanking you,

Amol Mathur

Garima Vijay

Divya Singhal

Ayushi Agarwal

Anoushka Agnihotri

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 Introduction

With operations in 18 countries across Asia and Africa, Bharti Airtel Limited may be a significant global
telecommunications business. The company, which is headquartered in New Delhi, India, is one of the top
three mobile service providers in the world in terms of users. 4G, 2G, and 3G non- wired services, mobile
commerce, fixed line services, high-speed home cable internet, DTH, and enterprise services, including
national and international long-distance services to carriers, are among the company's product offerings in
India. It provides 2G, 3G, and 4G wireless services as well as mobile commerce in the remaining geographies.

INDUSTRY
Bharti Airtel comes under the telecommunication industry. It encompasses public and private
organizations by the means of voice and data. It is the one of the largest telecommunication company in India.

SEGMENTS

Mobile Services (India) Home Services Digital TV Services Airtel Business

(Telephone & Broadband) (DTH)

MAJOR COMPETITORS

Jio Vodafone TATA Communications Reliance Communications Ltd.

KEY PERSONAL INFORMATION

Chairman

• Sunil Bharti Mittal

Managing Director & CEO

• Gopal Vittal
Non-Executive Director

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• Chua Sock Koong • Tao Yih Arthur Lang • Rakesh Bharti Mittal

MANAGEMENT DISCUSSION AND ANALYSIS

During the upheaval, Bharti Airtel was able to hang on to its market share and preserve its position. Last year,
the world economy being impacted by the COVID-19 pandemic, with the global GDP recording a de-growth
of 3.3%. The impact was greater in the early part of the year when most countries went into quarantine to
prevent the virus from spreading. The global economy began to revive in the second half of the year as
individuals and businesses adapted to new methods of working and limitations were gradually relaxed. The
wire line customer base stood at 20.19 Mn, Wireless Customer Base 1,167.71 Mn and Broadband Customer
Base 765.09 Mn at the end of February 28, 2021

Risk Factors:
• Regulatory and political uncertainties -Volatility and uncertainty in the macro environment with geo-
political tensions in countries of operations, and non-compliance of regulations
• Economic Uncertainties - Business operations might be impacted with instability in economies in our
countries of operations due to factors like inflation, interest rates, capital controls and currency
fluctuations.
• Poor network infrastructure - Risks in network infrastructure cost due to technical failures, human
errors, and natural disasters. Changes are required dynamically in IT sectors as it is a time of
upgradation of technologies constantly.
• Fiercely competitive battleground - unprecedented disruption and unfair pricing may lead to
competition and may lead to erosion of revenue with loss of customers. Customer expectations in terms
of quality, variety, features, and pricing are also changing, posing a danger to the business's long-term
viability.
• Data loss prevention - Risk of data loss can lead to accidental exposure of confidential information
across all endpoint devices.
• Digitalization and innovation - Rapid technology evolution may impact business functionality and lead
to slowdown in business.

Economy & Industry Factors:

• Economic & governance Factors - Encompasses all aspects that directly impact economic performance
of a business, such as taxation, regulatory compliance, technological changes as well as risks arising
from lack of sound governance.
• Social Factors - Risks which occur due to adverse changes in stakeholder relationships within
operations and in the value chain with employees, partners, customers, vendors and suppliers.
• Environmental Factors - Risks arise on account of environmental uncertainties such as climate change
or due to potential adverse impact of business on the environment.

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 RATIO TREND ANALYSIS

Ratios Mar’21 Mar’20 Mar’19

Liquidity Ratios
Current Ratio 0.49 0.583 0.353
Quick Ratio 0.488 0.582 0.352
Solvency Ratios
Debt to Equity 4.492 3.353 2.663
Debt to Assets 0.765 0.717 0.691
Interest Coverage (times) 1.1 0.77 0.53
Dividend Payout Ratio (%) -5.32 0 180.91
Dividend Yield (%) 0.33 0 1.16
Activity Ratios
Inventory Turnover (times) 378.25 557.93 1211.21
Asset Turnover (times) 0.285 0.275 0.307
Profitability Ratios
Gross Profit Margin (%) 69.1 56.9 52
Net Profit Margin -23.2 -35.8 1.6
Operating Profit Margin (%) 0.015 -0.037 -0.062
Return to Asset (%) 0.43 -1.03 -1.91
Return to Equity 1.479 1.178 1.146

The liquidity ratios improved from 2019 to 2020 but again saw a decline in 2021.

Under Solvency Ratios, the debt-to-equity ratio has been increasing from 2019 to 2021, which basically
means that the debt of Bharti Airtel has been increasing from the last three years. Interest-coverage ratio is
nothing but the capacity of the firm to pay of their interest. Bharti Airtel’s ratio had been below 1 in 2019 and
2020, indicating that it the company might not have sufficient funds to pay off its outstanding debt. There is a
minor improvement in 2021.

Activity ratios - Inventory turnover has continuously reduced from 2019 to 2021

The profitability ratios show us that even though the gross profit margin has been increasing over the last 3
years, the net profit margin has been declined from a positive % to a negative one. 2021 shows a slight
improvement but it is still on the negative side.

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 COMPARISON WITH PEERS

Market PE Debt to Current Quick Net Profit

Name Cap Ratio Equity Ratio Ratio Margin
Bharti Airtel Ltd 397501.91 -26.35 2 0.49 0.49 -13.42
Tata Communications
Ltd 40203.53 32.15 79.32 0.75 0.75 7.21
Vodafone Idea Ltd 32758.34 -0.74 -4.12 0.21 0.21 -99.07
Reliance
Communications Ltd 837 -0.14 -0.57 0.43 0.43 -743.39

P.E. ratio of Bharti Airtel is lesser than Tata communication Limited, Vodafone/Idea and Reliance
Communications

Debt to Equity ratio of Bharti Airtel is lesser than Tata communications

Current Ratio is again less than Tata communication but more than other two

Net Profit Margin is comparatively higher than Vodafone/idea but less than Tata communications.

Market Cap
Bharti Airtel Ltd Tata Communications Ltd
Vodafone Idea Ltd Reliance Communications Ltd
6.95% 0.18%
8.53%

84.34%

Market Capitalization of Bharti Airtel is leading with 84.34%

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MAJOR SHAREOLDERS, FII HOLDINGS & CHANGES IN THE LAST 3 YEARS

% of Shares
Shareholders Mar-19 Mar-20 Mar-21
Promoters 67.10% 59.00% 55.90%
FII 17.60% 20.30% 18.60%
DII 13.30% 15.80% 20.40%
Public 2.00% 4.90% 5.20%

Company's Shareholding Pattern

70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
Promoters FII DII Public
-10.00%

% of Shares Mar-19 % of Shares Mar-20 % of Shares Mar-21

Promoters’ shareholdings have decreased in March 2021 but not at large scale

FII shareholdings is more in March 2020

DII shareholdings has increased in March 2021

Public shareholdings are more in March 2021

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CONTINGENT LIABILITIES AS PERCENTAGE OF NET WORTH

Particulars Mar-19 Mar-20 Mar-21

Total Assets (A) 275,156.00 360,779.00 346,027.00
Total Liabilities (B) 190,267.00 258,648.00 264,800.00
Net Worth (A) - (B) 84,889.00 102,131.00 81,227.00
Contingent Liabilities 36,951.00 35,221.00 35,592.00

% of Contingent of net worth 43.53% 34.49% 43.82%

KEY PERFORMANCE INDICATORS

Particulars FY'21 Year on Year growth

Net Profit/Loss 1,50,835 53.13%
Revenue 1,00,615 18.82%
EBITDA 4,61,387 32.69%
Cash Profit from Operations 3,15,852 38.61%
EBT -42063' 19.56%

Particulars FY'21 Year on Year growth

Total Customer base 4,71,362 11.35%

SWOT ANALYSIS OF BHARTI AIRTEL

Strengths Weakness
Diverse portfolio of B2B services High Debt
In-house development User privacy
Opportunities Threats
Adoption of 5G Technology Mobile number portability
Untapped rural market New entrants with low price

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 Conclusion

An annual report's purpose is to provide timely, accurate, and relevant information, as well as to inform and
proclaim the company's accomplishments and performance during the year.

Here in this Annual Report Analysis of Bharti Airtel for last 3 years we can see that even at the time of
pandemic Airtel manages to keep its position stable in the market when the world economy was impacted.

Liquidity ratios were improved from 2019 to 2020 but again saw a decline in 2021.
2021 shows a slight improvement in profitability ratios but it is still on the negative side, but it is improving
YOY after the pandemic.

Market Capitalization of Bharti Airtel is leading with 84.34%.

It has a Diverse portfolio of B2B services in the In-house development.

It is for a long-term purchase. We can say that India has the cheapest telecom tariffs in the world. As a result,
ARPUs are on the rise and will continue to rise. Finally, Bharti's stock will rise because of the technological
expansion and digital adoption. From a positioning standpoint, it's a terrific stock to purchase right now.

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