Reliance Communication

Anil Dhirubhai Ambani Group

Presnetd by:-
RAJIV RANJAN
WINTER 09-11
ROLL NO.- 074
Presentation Content

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

so
Welcome Everybody
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 Reliance communication Ltd.
Type Public (BSE: RCOM)
Founded 2004
Headquarters Navi Mumbai, India
Anil Ambani, Chairman and Managing Director [1], Vice-
Chairman Reliance-ADA Group
Key people
S. P. Sukula CEO - Personal Business & Director -
Reliance Telecom
Industry Telecommunications
Products CDMA service, GSM service, Broadband Internet Service
US$ 4.26 Billion
Revenue
Net income US$ 1.35 billion (2008)
Total assets US$ 19.31 billion (2008)
Employees 33,000
www.rcom.com
Website 3 of 15
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.

India’s fastest customer additions since launch

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 History
 Reliance Communications is the flagship company of the Anil Dhirubhai Ambani
Group (ADAG) of companies. Listed on the National Stock Exchange and the
Bombay Stock Exchange, it is India’s leading integrated telecommunication
company.
 RTL(Reliance Telecom Ltd.) is one of the oldest licensees of CMSP.
 Its license dates back to 12.12.1995.
 RTL launched its GSM services during October 1997.
 With the merger of RISL now RTL is operating in 8 Telecom circles.
 Our constant endeavour is to achieve customer delight by enhancing the
productivity of the enterprises and individuals we serve.

 Reliance Mobile (formerly Reliance India Mobile), launched to mark the

auspicious beginning of Dhirubhai’s dream of ushering in a digital revolution in
India. Today, we can proudly claim that we were instrumental in harnessing the
true power of information and communication, by bestowing it in the hands of the
common man at affordable rates.

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History
 Reliance Communications, formerly known as Reliance Infocomm, along
with Reliance Telecom and Flag Telecom, is part of Reliance Communications
Ventures (RCoVL). It is an Indian telecommunications company. According to
National Stock Exchange data, Anil Dhirubhai Ambani controls 66.77 per cent
of the company, which accounts for more than 1.36 billion shares.[3] It is the
flagship company of the Reliance-Anil Dhirubhai Ambani Group, comprising of
power (Reliance Energy), financial services (Reliance Capital) and telecom
initiatives of the Reliance ADAG. It uses CDMA2000 1x technology for its
existing CDMA mobile services, and GSM-900/GSM-1800 technology for its
existing/newly launched GSM services.
 RelCom is also into Wireline Business throughout India and has the
largest optical fiber communication (OFC) backbone architecture [roughly
110,000 km] in the country.
 Reliance Communications has launched its Direct To Home (DTH) TV also,
known as "Big TV". RelCom have presence across all B2C communications
channel in one of the fastest growing markets in the world.

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 Reliance Communications is the flagship company of the Anil Dhirubhai Ambani
Group (ADAG) of companies. Listed on the National Stock Exchange and the
Bombay Stock Exchange, it is India’s leading integrated telecommunication company.
 RTL(Reliance Telecom Ltd.) is one of the oldest licensees of CMSP.
 Its license dates back to 12.12.1995.
 RTL launched its GSM services during October 1997.
 With the merger of RISL now RTL is operating in 8 Telecom circles.
 Our constant endeavour is to achieve customer delight by enhancing the productivity
of the enterprises and individuals we serve.

 Reliance Mobile (formerly Reliance India Mobile), launched to mark the auspicious
beginning of Dhirubhai’s dream of ushering in a digital revolution in India. Today, we
can proudly claim that we were instrumental in harnessing the true power of
information and communication, by bestowing it in the hands of the common man at
affordable rates.

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Contd…
 On the 30th December 2008, Reliance became the first telecom company in
India to operate in both CDMA as well as GSM technologies

 On the 30th December 2008, Reliance Communications became the first

telecom operator in the history of Indian telecommunications to
simultaneously launch its GSM services in 17 circles, namely Andhra
Pradesh, Chennai, Delhi, Gujarat, Haryana, Jammu & Kashmir,
Karnataka, Kerala, Maharashtra, Mumbai, Punjab, Rajasthan, Tamil
Nadu, Uttar Pradesh(East & West) thereby establishing itself as a pan-India
operator.[4] It already operates GSM services in 8 circles namely Assam,
Bihar & Jharkhand, Himachal Pradesh, Kolkata, Madhya Pradesh &
Chhattisgarh, North Eastern states, Orissa, West Bengal.

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Price List
Date 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
  0.48   0.67
/ Equity 
Total
  0.81   0.70
debt/equity 
Fixed assets
  0.77   0.69
turnover ratio 

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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 ) (Rs crore)
Per share
ratios  Mar ' 08 Mar ' 07

EPS (Rs)  12.53 9.43

Dividend per
  0.75   0.50
share 

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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
  41.73   43.21
margin (%) 
Gross profit
  29.26   28.82
margin (%) 
Net profit
  17.45   18.63
margin (%) 
Return on long
  11.81   11.16
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 29.21
Return on equity 11.74 10.41
Return on capital
10.96 9.65
employed
Interest coverage
8.43 5.01
ratio

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Cash flow
Mar ' 08 Mar ' 07
Profit before tax 2,604.09 2,420.85
Net cash flow-operating
2,982.80 10,469.12
activity
Net cash used in investing
-11,263.87 -4,883.86
activity
Net cash used in fin.
6,234.75 4,645.92
activity
Net inc/dec in cash and
-2,047.74 10,231.18
equivalent
Cash and equivalent begin
2,240.40 -10,162.73
of year
Cash and equivalent end of
192.66 68.45
year

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COMPARISON AS ON 20-03-09
Company Last Price Market Cap. Sales Net Profit Total Assets
Name (Rs. cr.) Turnover
Reliance 153 31,734 14,792 2,586 45,126
Comm

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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