27
Term Paper of Financial Management on “Reliance Communication & Bharti Airtel” Submitted To: Ms. Swati Goyal,
Term Paperof
FinancialManagement
on“Reliance Communication
&Bharti Airtel”
Submitted To:Ms. Swati Goyal,
Lecturer, Financial Management,LSB, LPU, Punjab
Submitted By:Abul Kalam KhanReg. No.:10900284
Roll No.:RR1906A18, Roll No.:R1906MBA-International Business
[email protected]@lpu.in
ACKNOWLEDGEMENT
I would like to express my sincere thanks and gratitude to Ms. Swati Goyal, Instructor (Faculty) of Financial Management, LSB, Lovely Professional University, Phagwara.
I am also thankful to advance technology which provided us wonderful and appreciated like Internet (Wi-Fi of LPU Campus). I obtained lot of important information from internet.
I am very thankful to my family member, faculty member and my all friends that encourage me and helped me to complete this Term Paper.
PREFACE
In my Term Paper I include introduction of the both the given companies, Reliance Communication and Bharti Airtel, product or services and comparison between both companies Balance Sheet and Profit and Loss Account. I include in this Term paper comparative table of
balance sheet and profit and loss account of both organization and also the comparative graphs of both organization. This study help me to know about the current condition of the both
organization.
Index
1: Introduction:
Reliance Communications Company Overview Main Subsidiaries Offices Products & Services Subscriber Base
Bharti Airtel Brands Company Overview Brands
2: Profit loss account of Reliance Communication:
3: Balance sheet of Reliance Communication:
4: Profit and Loss account of Bharti Airtel:
5: Balance sheet of Bharti Airtel:
6: Comparative Analysis between Reliance Communication and Bharti Airtel Profit and Loss Account:
7: Comparative Analysis between Reliance Communication and Bharti Airtel Balance Sheet:
8: Graphs related to the Comparative Analysis between Reliance Communication and Bharti Airtel:
9: References:
10: Bibliography:
Reliance Communications
Reliance Communications, formerly known as Reliance Infocom, along with Reliance Telecom and Flag Telecom, is part of Reliance Communications Ventures. Reliance Communications Limited (BSE: 532712) founded by the late Shri Dhirubhai H Ambani (1932-2002) is the flagship company of the Reliance Anil Dhirubhai Ambani Group. The Reliance Anil Dhirubhai Ambani Group currently has a net worth in excess of Rs. 64,000 crore (US$ 13.6 billion), cash flows of Rs. 13,000 crore (US$ 2.8 billion), net profit of Rs. 8,400 crore (US$ 1.8 billion).The Equity Shares of RCOM are listed on Bombay Stock Exchange Limited and National Stock Exchange Limited. The Global Depository Receipts and Foreign Currency Convertible Bonds are listed on Luxembourg Stock Exchange and Singapore Stock Exchange respectively.
Company Overview
Reliance Communications is India's truly integrated telecommunications service provider. The Company has a customer base of 1050 million including over 2.5 million individual overseas retail customers. It ranks among the Top 5 Telecom companies in the world by number of customers in a single country. Reliance Communications corporate clientele includes 2,100 Indian and multinational corporations, and over 800 global, regional and domestic carriers. A pan-India, next generation, integrated (wireless and wire line), convergent (voice, data and video) digital network that is capable of supporting best-of-class services spanning the entire communications value chain, covering over 24,000 towns and 600,000 villages has been established by Reliance Communications. Reliance Communications owns and operates the next generation IP enabled connectivity infrastructure, comprising over 190,000 kilometers of fiber optic cable systems in India, USA, Europe, Middle East and the Asia Pacific region.
Main Subsidiaries
1: Reliance Telecom
In July 2007, the company announced it is buying US-based managed ethernet and application delivery services company Yipes Enterprise Services for a cash amount of Rs. 1200 crore rupees (equivalent of USD 300 million). The deal was announced of the overseas acquisition, the Reliance group has amalgamated the United States-based Flag Telecom for $ 210 million [roughly Rs 950 crore (Rs 9.50 billion)].
2: Reliance Telecom
RTL operates in Madhya Pradesh, West Bengal, Himachal Pradesh, Orissa, Bihar, Assam, Kolkata and Northeast offering GSM services.[4]
3: Reliance Globalcom
RGL owns the world’s largest private undersea cable system[5] spanning 65,000 kms seamlessly integrated with Reliance Communications over 110,000 kms of domestic optic fiber provides a robust Global Service Delivery Platform connecting 40 key business markets in India, the Middle East, Asia, Europe, and the U.S.
4: Reliance Communications Infrastructure Limited (RCIL)
RCIL provide Internet Data Centre (IDC) services located in Mumbai and Bangalore. RCIL currently have IDC capacity of 304,000 sq. ft. with the market share close to 60%.
5: Reliance Big TV Limited
Reliance Big TV launched in August 2008 and thereafter acquired 1 million subscribers within 90 days of launch, the fastest ramp-up ever achieved by any DTH operator in the world. Reliance Big TV offers its 1.7 million customers DVD quality pictures across a bouquet of over 200 channels using the latest, state-of-the-art MPEG 4 technology.
6: Reliance Infratel Limited (RITL)
RITL’s business is to build, own and operate telecommunication towers, optic fiber cable assets and related assets at designated sites and to provide these passive telecommunication infrastructure assets on a shared basis to wireless service providers and other communications service providers under long-term contracts.
Offices
Reliance Communications Limited has its offices in Ahmedabad, Bangalore, Bhopal, Chandigarh, Chennai, Hyderabad, Jaipur, Kochi, Lucknow, Mumbai, New Delhi, Patna & Pune.
Products & Services
Products & Services promoted by the Group are Prepaid Mobile, Postpaid Mobile, Handsets, Blackberry, R World, Internet, Home Phone, Global Calling, Data Card, DTH.
Subscriber Base
The Reliance Communication subscriber base according to COAI - Cellular Operators Association of India is over 105:
GSM
Circle Name Post Paid Prepaid
Andhra Pradesh 6182 1890923
Delhi 19172 2054393
Gujarat 19414 2480642
Kerala 8049 901829
Karnataka 18572 2168131
Maharashtra & Goa 25288 3301389
Mumbai 24884 2083175
Punjab,Haryana & Himachal Pradesh 18630 2717375
Rajasthan 6631 2628940
Tamil Nadu & Andaman 25704 1909641
Not Defined 136636 345658
Uttar Pradesh 9093 6430945
West Bengal 8765 22154
RCOM GSM - Total sub base 29262215
CDMA
Circle Name Post Paid Prepaid Prepaid PCO
Andhra Pradesh 250597 4454341 476990
Delhi 505724 3211875 114702
Gujarat 288480 2992165 115298
Kerala 200796 2054601 125214
Karnataka 236288 3024954 253848
Maharashtra & Goa 295534 3457329 275002
Madhya Pradesh & Orissa 187860 4495163 139575
Mumbai 555120 3223211 166858
Punjab,Haryana & Himachal Pradesh 198497 2569998 92611
Rajasthan 151260 2284651 96704
Tamil Nadu & Andaman 304861 3854839 374900
Uttar Pradesh 270627 7976083 265494
West Bengal,Bihar & Jharkhand 240946 6606050 203919
RCOM CDMA - Total sub base 56592965
Bharti Airtel
Bharti Airtel formerly known as Bharti Tele-Ventures LTD (BTVL) is the largest cellular service provider in India, with more than 124 million subscribers as of February 2010. With this, Bharti is now the world's third-largest, single-country mobile operator and sixth-largest integrated telecom operator. It also offers fixed line services and broadband services. It offers its TELECOM services under the Airtel brand and is headed by Sunil Bharti Mittal. The company also provides telephone services and broadband Internet access (DSL) in top 95 cities in India. It also acts as a carrier for national and international long distance communication services. The company has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore.
Company Overview:
Globally, Bharti Airtel is the 3rd largest in-country mobile operator by subscriber base, behind China Mobile and China Unicom. In India, the company has a 24.6% share of the wireless services market, followed by 17.7% for Reliance Communications and 17.4% for Vodafone Essar. In January 2010, company announced that Manoj Kohli, Joint Managing Director and current Chief Executive Officer of Indian and South Asian operations, will become the Chief Executive Officer of the International Business Group from 1st April 2010. He will be
overseeing Bharti's overseas business. Current Dy. CEO, Sanjay Kapoor, will replace Manoj Kohli and will be the CEO with effective from 1st April, 2010.
Brands
Airtel
Airtel is a brand of telecommunication services in India, Bangladesh and in Sri Lanka owned and operated by Bharti Airtel. It is the largest cellular service provider in India in terms of number of subscribers. Services are offered under the brand name Airtel: Mobile Services (using GSM Technology), Broadband & Telephone Services (Fixed line, Internet Connectivity (DSL) and Leased Line), Long Distance Services and Enterprise Services (Telecommunications Consulting for corporates). It has presence in all 23 circles of the country and covers 71% of the current population (as of Financial Year 2007). Airtel has also launched 16Mb/s broadband plans in India, making it the first ISP to do so.
Airtel is facing a lot of flack from its customers, as people have become dissatisfied with its customer care services. (www.consumercomplaints.in - Indian Consumer Complaints Forum)
Airtel Sri Lanka
In December 2008, Bharti Airtel rolled out third generation services in Sri Lanka in association with Singapore Telecommunications. SingTel is a major player in the 3G space in Asia. It operates third generation networks in several markets across Asia. [5]
Airtel's operation in Sri Lanka, known as Airtel Lanka, commenced operations on the 12th of January 2009.
Airtel in Bangladesh
In January 2010, it was announced that the Bangladesh Telecommunication’s Regulatory Commission (BTRC) of The People's Republic of Bangladesh had given Bharti Airtel the go ahead to acquire a 70% stake in the Bangladesh business of Abu Dhabi based Warid Telcom. The latter had till date invested a total of $600 million, with plans to bring their Bangladesh investments to the $1 billion mark. Airtel's 70% stake in the company is said to be at a cost of an initial $300 million. [6]
Touchtel
Until September 18, 2004, Bharti provided fixed-line telephony and broadband services under the Touchtel brand. Bharti now provides all telecom services including fixed-line services under a common brand "Airtel".
BlackBerry
On 19 October 2004 Airtel announced the launch of a BlackBerry Wireless Solution in India. The launch is a result of a tie-up between Bharti Tele-Ventures Limited and Research In Motion (RIM).
Digital TVMain article: Airtel Digital TV On 9 October 2008, Airtel joined the DTH bandwagon in India with Airtel Digital TV, a Direct-to-Home Television service.
iPhone 3G
The Apple iPhone 3G was rolled out in India on 22 August 2008 via Airtel & Vodafone.
Profit loss account of Reliance Communication:
Mar ' 09 Mar ' 08 Mar ' 07 Mar ‘ 06
Income
Operating income 15,086.66 14,792.05 12,756.30 -
Expenses
Material consumed 29.95 15.15 16.48 -
Manufacturing expenses
5,975.57 4,144.21 3,358.34 -
Personnel expenses 758.36 858.65 684.4 1.11
Selling expenses 2,249.29 1,067.76 1,399.88 -
Administrative expenses
2,323.44 2,532.99 1,784.19 0.55
Expenses capitalized - - - -
Cost of sales 11,336.61 8,618.76 7,243.29 1.66
Operating profit 3,750.05 6,173.29 5,513.01 -
Other recurring income
675.12 28.68 169.61 13.26
Adjusted PBDIT 4,425.17 6,201.97 5,682.62 11.59
Financial expenses 1,153.24 870.05 456.55 -
Depreciation 1,933.51 1,843.66 1,836.12 2.74
Other write offs - - - -
Adjusted PBT 1,338.42 3,488.26 3,389.95 8.86
Tax charges 12.56 1,393.66 1,043.38 3.2
Adjusted PAT 1,325.86 2,094.60 2,346.57 5.65
Nonrecurring items 3,473.01 491.85 62.28 -
Other non-cash adjustments
3.8 - - -
Reported net profit 4,802.67 2,586.45 2,408.85 5.65
Earnigs before appropriation
9,102.91 4,881.35 2,414.50 5.65
Equity dividend 165.12 154.8 102.23 -
Preference dividend - - - -
Dividend tax 28.06 26.31 17.37 -
Retained earnings 8,909.73 4,700.24 2,294.90 5.65
Balance sheet of Reliance Communication:
Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05Sources of fundsOwner's fund
Equity share capital
1,032.01 1,032.01 1,022.31 0.05 0.01
Share application money
- - - 611.57 -
Preference share capital
- - - - -
Reserves & surplus
50,658.31 23,808.02 19,503.23 14,783.43 -
Loan funds
Secured loans 3,000.00 950 5,113.57 - -
Unsecured loans 27,903.61 19,336.43 9,454.27 - -
Total 82,593.93 45,126.46 35,093.38 15,395.04 0.01
Uses of fundsFixed assets
Gross block 37,941.15 21,576.32 20,625.82 198.09 -
Less : revaluation reserve
- - - - -
Less : accumulated depreciation
6,533.38 4,688.69 2,527.37 31.85 -
Net block 31,407.77 16,887.63 18,098.45 166.24 -
Capital work-in-progress
3,643.86 7,117.56 2,185.60 - -
Investments 31,364.75 13,844.14 5,434.43 12,074.10 -Net current assets
Current assets, loans & advances
25,543.01 18,515.29 20,107.04 3,158.96 0.01
Less : current liabilities & provisions
9,365.46 11,238.16 10,732.14 4.25 -
Total net current assets
16,177.55 7,277.13 9,374.90 3,154.70 0.01
Miscellaneous expenses not written
- - - - -
Total 82,593.93 45,126.46 35,093.38 15,395.04 0.01
Profit loss account Bharti Airtel:
Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Income
Operating income 34,048.32 25,761.11 17,851.61 11,259.12 8,142.44
Expenses
Material consumed 12.41 33.85 22.08 67.4 72.1
Manufacturing expenses
8,627.13 7,339.01 5,017.27 3,299.73 2,365.51
Personnel expenses 1,397.54 1,297.88 1,076.95 734.2 475.86
Selling expenses 2,210.43 1,842.51 1,126.34 804.15 828.2
Adminstrative expenses
8,608.03 4,588.53 3,351.31 2,315.91 1,403.09
Expenses capitalised - - - - -
Cost of sales 20,855.54 15,101.78 10,593.96 7,221.40 5,144.77
Operating profit 13,192.78 10,659.34 7,257.65 4,037.72 2,997.67
Other recurring income
235.99 266.91 101.7 40.75 18.93
Adjusted PBDIT 13,428.77 10,926.24 7,359.35 4,078.47 3,016.61
Financial expenses 434.16 393.43 282.07 236.81 317
Depreciation 3,206.28 3,166.58 2,353.30 1,432.34 1,019.36
Other write offs 178.82 266.07 137.8 127.39 161.34
Adjusted PBT 9,609.50 7,100.16 4,586.17 2,281.93 1,518.90
Tax charges 321.78 632.43 566.79 273.68 353.6
Adjusted PAT 9,287.72 6,467.73 4,019.39 2,008.25 1,165.30
Nonrecurring items -1,497.74 -162.87 3.92 -13.81 -1,726.88
Other non-cash adjustments
-46.15 -60.67 9.92 17.64 22.23
Reported net profit 7,743.84 6,244.19 4,033.23 2,012.08 -539.35
Earnigs before appropriation
19,541.05 11,778.12 5,489.61 1,225.65 -538.55
Equity dividend 379.65 - - - -
Preference dividend - - - - -
Dividend tax 64.52 - - - -
Retained earnings 19,096.89 11,778.12 5,489.61 1,225.65 -538.55
Balance sheet Bharti Airtel:
Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05Sources of fundsOwner's fund
Equity share capital
1,898.24 1,897.91 1,895.93 1,893.88 1,853.37
Share application money
116.22 57.63 30 12.13 2.72
Preference share capital
- - - - -
Reserves & surplus
25,627.38 18,283.82 9,515.21 5,437.42 2,675.38
Loan funds
Secured loans 51.73 52.42 266.45 2,863.37 3,959.88
Unsecured loans 7,661.92 6,517.92 5,044.36 1,932.92 1,034.41
Total 35,355.48 26,809.71 16,751.95 12,139.72 9,525.76
Uses of funds
Fixed assetsGross block 37,266.70 28,115.65 26,509.93 17,951.74 13,240.63
Less : revaluation reserve
2.13 2.13 2.13 2.13 2.13
Less : accumulated depreciation
12,253.34 9,085.00 7,204.30 4,944.86 3,475.64
Net block 25,011.23 19,028.52 19,303.51 13,004.75 9,762.86
Capital work-in-progress
2,566.67 2,751.08 2,375.82 2,341.25 994.46
Investments 11,777.76 10,952.85 705.82 719.7 931.9
Net current assets
Current assets, loans & advances
10,466.63 8,439.38 5,406.81 3,338.88 2,486.31
Less : current liabilities & provisions
14,466.89 14,362.33 11,042.67 7,272.80 4,708.12
Total net current assets
-4,000.26 -5,922.95 -5,635.86 -3,933.92 -2,221.80
Miscellaneous expenses not written
0.09 0.2 2.66 7.94 58.35
Total 35,355.48 26,809.71 16,751.95 12,139.72 9,525.76
Comparative Analysis between Reliance Communication and Bharti Airtel Profit and Loss Account:
Mar '
09Mar '
09Change
Change in %
Mar ' 08 Mar ' 08 ChangeChange in %
Income
Operating income
15,086.66
34,048.32
18,961.66
125.6814,792.0
525,761.1
110,969.0
674.16
Expenses
Material consumed
29.95 12.41 -17.54 -58.56 15.15 33.85 18.70 123.43
Manufacturing expenses
5,975.57 8,627.13 2,651.56 44.37 4,144.21 7,339.01 3,194.80 77.09
Personnel expenses
758.36 1,397.54 639.18 84.28 858.65 1,297.88 439.23 51.15
Selling expenses
2,249.29 2,210.43 -38.86 -1.73 1,067.76 1,842.51 774.75 72.56
Adminstrative expenses
2,323.44 8,608.03 6,284.59 270.49 2,532.99 4,588.53 2,055.54 81.15
Cost of sales11,336.6
120,855.5
49,518.93 83.97 8,618.76
15,101.78
6,483.02 75.22
Operating profit
3,750.0513,192.7
89,442.73 251.80 6,173.29
10,659.34
4,486.05 72.67
Other recurring income
675.12 235.99 -439.13 -65.04 28.68 266.91 238.23 830.65
Adjusted PBDIT
4,425.1713,428.7
79,003.60 203.46 6,201.97
10,926.24
4,724.27 76.17
Financial expenses
1,153.24 434.16 -719.08 -62.35 870.05 393.43 -476.62 -54.78
Depreciation 1,933.51 3,206.28 1,272.77 65.83 1,843.66 3,166.58 1,322.92 71.76
Other write offs
0 178.82 178.82#DIV/
0!0 266.07 266.07
#DIV/0!
Adjusted PBT
1,338.42 9,609.50 8,271.08 617.97 3,488.26 7,100.16 3,611.90 103.54
Tax charges 12.56 321.78 309.222,461.9
41,393.66 632.43 -761.23 -54.62
Adjusted PAT
1,325.86 9,287.72 7,961.86 600.51 2,094.60 6,467.73 4,373.13 208.78
Non recurring items
3,473.01-
1,497.74-
4,970.75-143.13 491.85 -162.87 -654.72 -133.11
Other non cash adjustments
3.8 -46.15 -49.95-
1,314.47
0 -60.67 -60.67#DIV/
0!
Reported net profit
4,802.67 7,743.84 2,941.17 61.24 2,586.45 6,244.19 3,657.74 141.42
Earnigs before appropriation
9,102.9119,541.0
510,438.1
4114.67 4,881.35
11,778.12
6,896.77 141.29
Equity dividend
165.12 379.65 214.53 129.92 154.8 0 -154.80 -100.00
Dividend tax 28.06 64.52 36.46 129.94 26.31 0 -26.31 -100.00
Retained earnings
8,909.7319,096.8
910,187.1
6114.34 4,700.24
11,778.12
7,077.88 150.59
Analysis
In this table I just take only two current years for comparison between the both companies. If we take a one by one transaction of the Profit and Loss Account Manufacturing Expenses, Personal Expenses, Selling Expenses, Administrative Expenses of Bharti Airtel are more than the reliance Communication, but Operating Profit of the Bharti Airtel is more than the Reliance Communication and also the PBT (Profit before Tax) and PAT (Profit after Tax) are more than the Reliance Communication. It shows the capability of Bharti Airtel how they are able to earn more profit than the other company. Also the Retained Earnings of the Bharti Airtel is more then two times than the Reliance Communication.
Comparative Analysis between Reliance Communication and Bharti Airtel Balance Sheet:
Mar ' 09 Mar ' 09 ChangeChange
in %Mar ' 08 Mar ' 08 Change
Change in %
Sources of funds
Owner's fund
Equity share capital
1,032.01 1,898.24 866.23 83.94 1,032.01 1,897.91 865.90 83.90
Share application money
0 116.22 116.22 #DIV/0! 0 57.63 57.63 #DIV/0!
Preference share capital
0 0 0.00 #DIV/0! 0 0 0.00 #DIV/0!
Reserves & surplus
50,658.31 25,627.38-
25,030.93-49.41 23,808.02 18,283.82 -5,524.20 -23.20
Loan funds
Secured loans 3,000.00 51.73 -2,948.27 -98.28 950 52.42 -897.58 -94.48
Unsecured loans
27,903.61 7,661.92-
20,241.69-72.54 19,336.43 6,517.92
-12,818.51
-66.29
Total 82,593.93 35,355.48-
47,238.45-57.19 45,126.46 26,809.71
-18,316.75
-40.59
Uses of funds
Fixed assets
Gross block 37,941.15 37,266.70 -674.45 -1.78 21,576.32 28,115.65 6,539.33 30.31
Less : revaluation reserve
0 2.13 2.13 #DIV/0! 0 2.13 2.13 #DIV/0!
Less : accumulated depreciation
6,533.38 12,253.34 5,719.96 87.55 4,688.69 9,085.00 4,396.31 93.76
Net block 31,407.77 25,011.23 -6,396.54 -20.37 16,887.63 19,028.52 2,140.89 12.68
Capital work-in-progress
3,643.86 2,566.67 -1,077.19 -29.56 7,117.56 2,751.08 -4,366.48 -61.35
Investments 31,364.75 11,777.76-
19,586.99-62.45 13,844.14 10,952.85 -2,891.29 -20.88
Net current assets
Current assets, loans & advances
25,543.01 10,466.63-
15,076.38-59.02 18,515.29 8,439.38
-10,075.91
-54.42
Less : current liabilities & provisions
9,365.46 14,466.89 5,101.43 54.47 11,238.16 14,362.33 3,124.17 27.80
Total net current assets
16,177.55 -4,000.26-
20,177.81-124.73 7,277.13 -5,922.95
-13,200.08
-181.39
Miscellaneous expenses not written
0 0.09 0.09 #DIV/0! 0 0.2 0.20 #DIV/0!
Total 82,593.93 35,355.48-
47,238.45-57.19 45,126.46 26,809.71
-18,316.75
-40.59
Analysis
In this table I just take only two current years for comparison between the both companies. If we take a one by one transaction of the Balance Sheet, Equity Share Capital of the Bharti Airtel is Rs.866.23 (2009) and Rs.865.90 (2008) more than Reliance Communication but Reserve and Surplus of Reliance Communication is more than the Bharti Airtel in both the year, it can be the reason of future security or safe guard for the future uncertainty. The Total Loan of the Reliance Communication more than the Bharti Airtel, so it shows the dependency of the Reliance Communication is more on the External Resources than the Bharti Airtel. It means Reliance has more liability than the Bharti Airtel. In other hand the use of fund of Reliance Communication is more the Bharti Airtel, it is approx. three times more, but return is not satisfactory. And also the current asset of Reliance Communication is more than the double of the Bharti Airtel.
Graphs related to the Comparative Analysis between Reliance Communication and Bharti Airtel:
During the year 2005 to 2009, both company’s market share price goes down but in this case Bharti Airtel has a good market position in comparison to the Reliance, because according to the current information from the stock market (05/05/10) the current price of the Bharti Airtel share in the market is Rs.296.30 (shows profit) and Reliance Communication share price is Rs.160.15 (shows loss).
During the year 2006 to 2008 there was no dividend paid by the Bharti Airtel, but in 2009 Bharti Airtel paid Rs.379.65 crore dividend to the shareholder for maximizing the wealth and for retaining the interest of shareholder in the organization. In case of Reliance Communication in year 2006 there was no dividend but in the year 2007 to 2009 they give consequently Rs.102.23, Rs.154.8, and Rs.165.12 also retain interest in the organization and wealth maximization.
From the year 2007 to 2009 Reliance Communication raising the investments in the market for growth prospective but response or return not satisfactory because as we know the market condition of Reliance is in share market is not up to the mark. And Bharti Airtel also start investment from 2007 to 2009 but result is satisfactory and off course the market condition of the Bharti Airtel is good.
This graph shows the period of company’s foundation to till 2009 Reliance Communication raised approx. Rs.1000.00 crore equity share capital but in case of Bharti Airtel this figure is almost double, it’s approx. Rs.1900.00 crore. So it shows the stability in the market of the company and strong position in the market and also helps the organization to make a strong faith between the consumer or customer as well as in the investor and build the goodwill of the company.
From the year 2006 to 2007 the PAT (Profit after Tax) of the Reliance Communication was very satisfactory but from the year 2007 to 2009 the PAT (Profit after Tax) of Reliance Communication continuously decreasing but here again Bharti Airtel has a Gold Hand because they continuously increases their PAT (Profit after Tax) and again they have strong position in the market in comparison to the Reliance Communication.
References and Bibliography:
1: http://en.wikipedia.org/wiki/Reliance_Communications
2: http://money.rediff.com/companies/reliance-communications-ltd/15200050/profit-and-loss
3: http://en.wikipedia.org/wiki/Bharti_Airtel
4: http://money.rediff.com/companies/bharti-airtel-ltd/15200022/balance-sheet
