A Project Report on

“WORKING CAPITAL MANAGEMENT OF BHARTI AIRTEL LTD”

SUBMITTED BY

Mr. GUPTA RISHU

SHANKAR

BAF Semester Vl

Project Submitted To “University of Mumbai”

In Partial Fulfilment for the

Award of Graduation in B.Com (Accounting and Finance)

UNDER THE GUIDANCE OF

Dr. KRIPA THAKKAR

MUMBAI PRADESH ARYA VIDYA SABHA’S

GURUKUL COLLEEG OF COMMERCE

(PERMANENTLY AFFILIATED TO UNIVERSITY OF MUMBAI)

NAAC Re-Accredited ‘B+’

ISO Certified: 21001/14001/50001

GHATKOPAR (EAST), MUMBAI- 400077

2024-25
 DECLARATION

I Mr. GUPTA RISHU SHANKAR student of B.Com (Accounting & Finance)

Semester Vl (April 2024) of GURUKUL COLLEGE OF COMMERCE,
MUMBAI-400077 to hereby declare that I have completed the project work
titled “ W O R K I N G C A P I T A L M A N A G E M E N T O F B H A R T
I
A I R T E L L T D ” as a part of academic fulfilment.

THE INFORMATION CONTENT IN THIS PROJECTN WORK IS TRUE AND

ORIGINAL TO THE BEST OF MY KNOWLEDGE AND BELIFE.

Mr. GUPTA RISHU SHANKAR

 ACKNOWLEGEMENT

Firstly, I wish to express my sincere and heartfelt thanks to my Project Guide Mr. DR.
KRIPA THAKKAR, for her distinctive guidance and encouragement throughout the
project work.

I also take this opportunity to express my deep sense of gratitude to our Principal, DR.
MAMTA RANE, B.Com (Accounting & Finance) Co-ordinator Dr. PRITI GHAG
and our college Librarian for their continuous support to complete this project.

Lastly, I wish to express my heartfelt gratitude to my beloved parents (names) and to all
my friends for their encouragement and support in completing this project work.

Above all I thank Lord Almighty for abundant mercies and infinite grace which showed
upon me to complete the project work.
 CERTIFICATE

This is to certify that Ms. Krutika Dashrath Patel the student of MUMBAI PRADESH
ARYA VIDYA SABHA’s GURUKUL COLLEGE OF COMMERCE Studying in
B.Com (Accounting & Finance) Semester Vl, ROLL NO. 21 has successfully
completed the project entitled “WORKING CAPITAL MANAGEMENT OF
BHARATI ARITEL LTD” as a part of assignment under my supervision during
the academic year 2024-2025.

PRINCIPAL EXTERNAL GUIDE

DR. MAMTA RANE

CO-ORDINATOR INTERNAL GUIDE

DR. PRITI GHAG DR. KRIPA THAKKAR

 INDEX

SR.NO TITLE PAGE

NO
1 Chapter:1 INRODUCTION 1-16

2 Chapter:2 RESEARCH & METHODOLOGY 17-20

3 Chapter:3 LITERATURE REVIEW 21-25

4 Chapter:4 DATA ANALYSIS 26-45

5 Chapter:5 SWOT ANALYSIS 45-49

6 Chapter:6 LIMITATION OF THE STUDY 50-51

7 FINDINGS & CONCLUSION 52-57

8 SUGGESTIONS & RECOMMENDATION 57-60

BIBLIOGRAPHY 61-62
CHAPTER NO.1
INTRODUCTION
 1. INTRODUCTION

1.1 Working Capital – Overall View

1.2 Circulation System of Working Capital
1.3 Bharti Airtel Ltd
1.4 Schedule of Changes in Working Capital
1.5 Need of working capital
 1.1 WORKING CAPITAL - OVERALL VIEW

Working Capital management is the management of assets that are

current in nature. Current assets, by accounting definition are the assets
normally converted in to cash in a period of one year. Hence working capital
management can be considered as the management of cash, market securities
receivable, inventories and current liabilities. In fact, the management of
current assets is similar to that of fixed assets the sense that is both in cases
the firm analyses their effect on its profitability and risk factors, H differ on
three major aspects.

Working Capital = Current Asset – Current Liability

In managing fixed assets, time is an important factor discounting and
compounding aspects of time play an important role in capital budgeting and
a minor part in the management of current assets.
The large holdings of current assets, especially cash, may strengthen the firm’s
liquidity position, but is bound to reduce profitability of the firm as ideal car
yield nothing.
1. The level of fixed assets as well as current assets depends upon the
expected sales, but it is only current assets that are ad the fluctuation
in the short run u a business.
2. To understand working capital better we should have basic knowledge
about the various aspects of working capital. To start with, there are
two concepts of working capital:
 Gross Working Capital

 Net working Capital

1
  Gross Working Capital:
Gross working capital, which is also simply known as working capital, refers to
the firm’s investment in current assets: Another aspect of gross working
capital points out the need of arranging funds to finance the current assets.
The gross working capital concept focuses attention on two aspects of current
assets management, firstly optimum investment in current assets and secondly
in financing the current assets. These two aspects will help in remaining away
from the two danger points of excessive or inadequate investment in current
assets. Whenever a need of working capital funds arises due to increase in
level of business activity or for any other reason the arrangement should be
made quickly, and similarly if some surpluses are available, they should not
be allowed to lie ideal but should be put to some effective use.

 Net Working Capital:

The term net working capital refers to the difference between the current assets
and current liabilities. Net working capital can be positive as well as negative.
Positive working capital refers to the situation where current assets exceed
current liabilities and negative working capital refers to the situation where
current liabilities exceeds current assets. The net working capital helps in
comparing the liquidity of the same firm over time. For purposes of the
working capital management, therefore Working Capital can be said to
measure the liquidity of the firm. In other words, the goal of working capital
management is to manage the current assets and liabilities in such a way that
an acceptable level of net working capital is maintained.

2
  Importance of working capital management:

Management of working capital is very much important for the success of the
business. It has been emphasized that a business should maintain sound
working capital position and also that there should not be an excessive level
of investment in the working capital components. As pointed out by Ralph
Kennedy and Stewart MC muller, “the inadequacy or mis-management of
working capital is one of a few leading causes of business failure.

 Determinants of Working Capital

There is no specific method to determine working capital requirement for a

business. There are a number of factors affecting the working capital
requirement. These factors have different importance in different businesses
and at different times. So a thorough analysis of all these factors should be
made before trying to estimate the amount of working capital needed. Some
of the different factors are mentioned here below:-

 Nature of business: Nature of business is an important factor in

determining the working capital requirements. There are some
businesses which require a very nominal amount to be invested in
fixed assets but a large chunk of the total investment is in the form of
working capital. The business, for example, are of the trading and
financing type. There are businesses which require large investment
in fixed assets and normal investment in the form of working capital.
 Size of business: It is another important factor in determining the
working capital requirements of a business. Size is usually measured
in terms of scale of operating cycle. The amount of working capital
needed is directly proportional to the scale of operating cycle i.e. the
larger the scale of operating cycle the large will be the amount
working capital and vice versa.

3
 Business Fluctuations: Most business experience cyclical and
seasonal fluctuations in demand for their goods and services. These
fluctuations affect the business with respect to working capital
because during the time of boom, due to an increase in business
activity the amount of working capital requirement increases and the
reverse is true in the case of recession. Financial arrangement for
seasonal working capital requirements are to be made in advance.

 Production Policy: As stated above, every business has to cope with

different types of fluctuations. Hence it is but obvious that production
policy has to be planned well in advance with respect to fluctuation.
No two companies can have similar production policy in all respects
because it depends upon the circumstances of an individual company.

 Firm’s Credit Policy: The credit policy of a firm affects working

capital by influencing the level of book debts. The credit term are
fairly constant in an industry but individuals also have their role in
framing their credit policy. A liberal credit policy will lead to more
amount being committed to working capital requirements whereas a
stern credit policy may decrease the amount of working capital
requirement appreciably but the repercussions of the two are not
simple. Hence a firm should always frame a rational credit policy
based on the credit worthiness of the customer.

 Availability of Credit: The terms on which a company is able to avail

credit from its suppliers of goods and devices credit/also affects the
working capital requirement. If a company in a position to get credit
on liberal terms and in a short span of time then it will be in a position
to work with less amount of working capital. Hence the amount of

4
working capital needed will depend upon the terms a firm is granted
credit by its creditors.

 Growth and Expansion activities: The working capital needs of a

firm increases as it grows in term of sale or fixed assets. There is no
precise way to determine the relation between the amount of sales and
working capital requirement but one thing is sure that an increase in
sales never precede, the increase in working capital but it is always
the other way round

 Price Level Changes: Generally increase in price level makes the

commodities dearer. Hence with increase in price level the working
capital requirements also increases. The companies which are in a
position to alter the price of these commodities in accordance with the
price level changes will face less problems as compared to others. The
changes in price level may not affect all the firms in same way. The
reactions of all firms with regards to price level changes will be
different from one other.

5
 1.2 CIRCULATION SYSTEM OF WORKING CAPITAL

In the beginning the funds are obtained from the issue of shares, often
supplemented by long term borrowings. Much of these collected funds are
used in purchasing fixed assets and remaining funds are used for day to day
operation as pay for raw material, wages overhead expenses. After this
finished goods are ready for sale and by selling the finished goods either
account receivable are created and cash is received. In this process profit is
earned. This account of profit is used for paying taxes, dividend and the
balance is ploughed in the business.
Working capital is considered to efficiently circulate when it turns over quickly.
As circulation increases, the investment in current assets will decrease. Total
Assets is the sum of all assets, current and fixed. The asset turnover ratio
measures the ability of a company to use its assets to efficiently generate
sales. The higher the ratio indicates that the company is utilizing all its assets
efficiently to generate sales. Companies with low profit margins tend to have
high asset turnover.

6
7
1.3 BHARTI AIRTEL LTD

Bharti Airtel Limited, also known as Airtel, is an Indian

multinational telecommunications services company based in New Delhi, Delhi
NCT, India. It operates in 18 countries across South Asia and Africa, and also in
the Channel Islands. Airtel provides 2G, 4G LTE, 4G+ mobile services, fixed line
broadband and voice services depending upon the country of operation. Airtel had also
rolled out its VoLTE technology across all Indian telecom circles. It is the second largest
mobile network operator in India and the second largest mobile network operator in the
world with over 457.96 million (45.796 crore) subscribers. Airtel was named India's 2nd
most valuable brand in the first ever Brandz ranking by Millward Brown and WPP plc.

Airtel is credited with pioneering the business strategy of outsourcing all of its business
operations except marketing, sales and finance and building the 'minutes factory' model
of low cost and high volumes. The strategy has since been adopted by several
operators. Airtel's equipment is provided and maintained by Ericsson, Huawei, and Nokia
Networks whereas IT support is provided by Amdocs. The transmission towers are
maintained by subsidiaries and joint venture companies of Bharti including Bharti
Infratel and Indus Towers in India. Ericsson agreed for the first time to be paid by the

8
minute for installation and maintenance of their equipment rather than being paid up
front, which allowed Airtel to provide low call rates of 1 (1.4¢ US)/minute.

 HISTORY

In 1984, Sunil Mittal started assembling push-button phones in India, which he earlier
used to import from a Taiwan company, Kingtel, replacing the old fashioned,
bulky rotary phones that were in use in the country then. Bharti Telecom Limited (BTL)
was incorporated and entered into a technical tie up with Siemens AG of Germany for
manufacture of electronic push button phones. By the early 1990s, Bharti was making fax
machines, cordless phones and other telecom gear. He named his first push-button phones
as 'Mitbrau'.

In 1992, he successfully bid for one of the four mobile phone network licences auctioned
in India. One of the conditions for the Delhi cellular license was that the bidder have
some experience as a telecom operator. So, Mittal clinched a deal with the French
telecom group Vivendi. He was one of the first Indian entrepreneurs to identify the
mobile telecom business as a major growth area. His plans were finally approved by the
Government in 1994 and he launched services in Delhi in 1995, when Bharti Cellular
Limited (BCL) was formed to offer cellular services under the brand name AirTel.
Within a few years Bharti became the first telecom company to cross the 2 million
mobile subscriber mark. Bharti also brought down the STD/ISD cellular rates in India
under brand name 'Indiaone'.

In 1999, Bharti Enterprises acquired control of JT Holdings, and extended cellular

operations to Karnataka and Andhra Pradesh. In 2000, Bharti acquired control of Skycell
Communications, in Chennai. In 2001, the company acquired control of Spice Cell
in Calcutta. Bharti Enterprises went public in 2002, and the company was listed
on Bombay Stock Exchange and National Stock Exchange of India. In 2003, the cellular

9
phone operations were re-branded under the single Airtel brand. In 2004, Bharti acquired
control of Hexacom and entered Rajasthan. In 2005, Bharti extended its network to
Andaman and Nicobar. This expansion allowed it to offer voice services all across India.

Airtel launched "Hello Tunes", a caller ring back tone service (CRBT), in July 2004
becoming the first operator in India to do so. The Airtel theme song, composed by A.R.
Rahman, was the most popular tune in that year.

In May 2008, it emerged that Airtel was exploring the possibility of buying the MTN
Group, a South Africa-based telecommunications company with coverage in 21 countries
in Africa and the Middle East. The Financial Times reported that Bharti was considering
offering US$45 billion for a 100% stake in MTN, which would be the largest overseas
acquisition ever by an Indian firm. However, both sides emphasis the tentative nature of
the talks, while The Economist magazine noted, "If anything, Bharti would be marrying
up," as MTN has more subscribers, higher revenues and broader geographic
coverage. However, the talks fell apart as MTN Group tried to reverse the negotiations by
making Bharti almost a subsidiary of the new company. In May 2009, Bharti Airtel again
confirmed that it was in talks with MTN and the companies agreed to discuss the
potential transaction exclusively by 31 July 2009. Talks eventually ended without
agreement, some sources stating that this was due to opposition from the South African
government.

 ACQUISITION AND MERGERS

MTN Group merger negotiations

In May 2008, it emerged that Airtel was exploring the possibility of buying the MTN
Group, a South Africa-based telecommunications company with operations in 21
countries in Africa and the Middle East. The Financial Times reported that Bharti was
considering offering US$45 billion for a 100% stake in MTN, which would be the largest
overseas acquisition ever by an Indian firm. However, both sides emphasised the

10
tentative nature of the talks. The Economist magazine noted, "If anything, Bharti would
be marrying up", as MTN had more subscribers, higher revenues and broader geographic
coverage. However, the talks fell apart as MTN Group tried to reverse the negotiations by
making Bharti almost a subsidiary of the new company.

In May 2009, Airtel confirmed that it was again in talks with MTN and both companies
agreed to discuss the potential transaction exclusively by 31 July 2009. Airtel said
"Bharti Airtel Ltd is pleased to announce that it has renewed its effort for a significant
partnership with MTN Group". The exclusivity period was extended twice up to 30
September 2009. Talks eventually ended without agreement.

A solution was proposed where the new company would be listed on two stock
exchanges, one in South Africa and one in India. However, dual-listing of companies is
not permitted by Indian law.

In Jun 2010, Bharti struck a deal to buy Zain's mobile operations in 15 African countries,
in India's second biggest overseas acquisition after Tata Steel's $13 billion buy of Corus
in 2007. Bharti Airtel completed its $10.7 billion acquisition of African operations from
Kuwaiti firm on 8 June 2010, making Airtel the world's fifth largest wireless carrier by
subscriber base. Airtel has reported that its revenues for the fourth quarter of 2010 grew
by 53% to US$3.2 billion compared to the previous year, newly acquired Zain Africa
division contributed US$911 million to the total. However, net profits dropped by 41%
from US$470 million in 2009 to US$291 million 2010 due to a US$188 million increase
in radio spectrum charges in India and an increase of US$106 million in debt interest.

Warid Bangladesh and Robi

In 2010, Warid Telecom sold a majority 70.90% stake in the company to Bharti Airtel
for US$300 million. The Bangladesh Telecommunication Regulatory Commission
approved the deal on 4 January 2010. Bharti Airtel Limited took management control of
the company and its board, and rebranded the company's services under its own "airtel"

11
brand from 20 December 2010. Warid Telecom sold its remaining 30% share to Bharti
Airtel's Singapore-based concern Bharti Airtel Holdings Pvt Limited in March 2013.

On 16 November 2016, airtel Bangladesh was merged into Robi as a product brand of
Robi, where Robi Axiata Limited is the licensee of airtel brand in Bangladesh.[36] Robi is
a joint venture between Axiata Group holding 68.7%, Bharti Airtel holding 25%,
and NTT DoCoMo Inc. holding 6.3%.

Telecom Seychelles

On 11 August 2010, Bharti Airtel announced that it would acquire 100% stake in
Telecom Seychelles for US$62 million taking its global presence to 19 countries.
Telecom Seychelles began operations in 1998 and operates 3G, Fixed Line, ship to shore
services satellite telephony, among value added services like VSAT and Gateways for
International Traffic across the Seychelles under the Airtel brand. The company has over
57% share of the mobile market of Seychelles. Airtel announced plans to invest
US$10 million in its fixed and mobile telecoms network in the Seychelles over three
years, whilst also participating in the Seychelles East Africa submarine cab.

12
 VISSION MISSION VALUES

• Airtel will be • We at Airtel • Empowering

brand, the always think in people
most loved fresh and • Being
brand, innovative ways flexible
enriching the about the needs of • Making it
life of our customers and happen
millions. how we want them • Openess and
to feel we deliver transperancy
what we promise • Creating
and go out of our
positive
way to delight the
impact.
customer withh a
little bit more.

13
1.4 SCHEDULE OF CHANGES OF WORKING CAPITAL

14
1.5 NEED FOR WORKING CAPITAL

The need for working capital (gross) or current assets cannot be over
emphasized. As the objective of financial decision making is to maximize the
shareholder’s wealth, it is necessary to generate sufficient profits. The extent
to which profits can be earned will naturally depend upon the magnitude of
the sales, among other things. A successful sales program is, in other words,
necessary for earning profits by any business enterprise. However, sales do
not convert into cash instantly; there is invariably a time lag between the sale
of goods and the receipt of cash. There is, therefore, a need for working
capital in the form of current assets to deal with the problem arising out of the
lack of immediate realisation of cash against goods sold. Therefore, sufficient
working capital is necessary to sustain sales activity. Technically, this is
referred to as the operating or cash-cycle. The operating cycle can be said to
be at the heart of the need for working capital. The continuing flow from cash
to suppliers,to inventory, to accounts receivable and back into cash. The cycle
refers to the length of time necessary to complete the following cycle of
events
1. Conversion of cash into inventory.

2. Conversion of raw materials into work in progress

3. Conversion of work in progress into finished goods

4. Conversion of finished goods into account receivable

5. Conversion of account receivable into cash

If it were possible to complete the sequences instantaneously, there would be

no need for current assets (working capital). But since it is not possible, the
firm is forced to have current assets. Since cash inflows and cash inflows do
not match, firms have to necessarily keep cash or invest in short-term liquid
securities so that they will be in position to meet obligations when they

15
become due. Similarly, firm must have adequate inventory to guard against
the possibility of not being able to meet a demand for their products.
Adequate inventory, therefore, provides a cushion against being out of stock.
If firms have to be competitive, they must sell goods to their customers on
credit, which necessitates the holding of accounts receivable. It is in these
ways that an adequate level of working capital is absolutely necessary for
smooth sales activity which, inturn, enhances the owner’s wealth.

16
 CHAPTER.2

RESEARCH METHODOLOGY

17
 2. RESEARCH AND METHODOLOGY

2.1 Research methodology

2.2 Primary data

2.3 Secondary data

18
2.1 Research & methodology

A research project may also be an expansion on past work in the

field. Research projects can be used to develop further knowledge on a
topic, or in the example of a school research project, they can be used to
further a student’s research prowess to prepare them for future jobs or
reports. To test the validity of instruments, procedures, or experiments,
research may replicate elements of prior projects or the project as a whole.
The primary purposes of basic research (as opposed to applied research)
are documentation, discovery, interpretation, or the research and
development (R&D) of methods and systems for the advancement of
human knowledge. Approaches to research depend on epistemologies,
which vary considerably both within and between humanities and
sciences. There are several forms of research: scientific, humanities,
artistic, economic, social, business, marketing, practitioner research, life,
technological, etc. The scientific study of research practices is known as
meta-research.

2.2Primary data
Primary data is a type of data that is collected by researchers directly
from main sources through interviews, surveys, experiments, etc. Primary
data are usually collected from the source—where the data originally
originates from and are regarded as the best kind of data in research.
The sources of primary data are usually chosen and tailored
specifically to meet the demands or requirements of a particular research.
Also, before choosing a data collection source, things like the aim of the
research and target population need to be identified.

19
2.3 Secondary data

It is collected from standard books, internal sources, magazines and

newspaper and also collecting data from external and internal sources from
the company annual reports, company additional profile and company
internal website.
This study is quantitative nature meaning it primarily deals with
financial statement of Bharti Airtel Ltd for the past five years. This study
is based on secondary data which is taken from company’s website and the
annual reports. The data is analyzed by the ratio analysis and the
performance of the company is clearly explained for the study period.

20
 CHAPTER. 3

LITERATURE REVIEW

21
INTRODUCTION

Working capital management plays an important role in financial management of the

industry. Numbers of researcher has been done the research on different components of
working capital and subjects on. Here, I have included the relevant articles as well
research work on the same topic and subject. And this is a part of my research work on
the same title the working capital management of selected textile companies of India. The
main aim of this paper is to identify the gaps in current body of my research work which
gives the direction towards forward attention to be given.

NCEAR (1966):-
The National council of applied Economic Research (NCEAR) in 1966 first time formal
study was conducted on working capital management in India. The council published a
structure of working capital" which was limited analysis of the creation of working
capital with special attention to the fertilizers, and cement and sugar industries the main
objective of this study was emphasized on come out with findings that working capital
management practices were extremely unplanned and hence need to develop proper
accounting policies like inventory management, debtors management as above. And the
study suggested developing suitable working capital policies required in the success of
business.

Bhatt V. V. (1972):-
He has given concentration on system to appraise working capital management and its
finance specially for the large scale companies. This tools also helpful to other sectors
like agriculture as well retail trade etc. As bank provide short term finance to operation of
business at the same time need to pay attention on repayment of loan and required
finance necessity. If these two area is to be maintain properly no need to appraise the
working capital management concern

22
Smith Keith V. (1973):-
Research has been given focused on the short term finance need to be given more
attention for the success of the individual firm. For that finance manager has to give more
attention on current assets and current liability. Many firms do investment of current
assets in a basket while current liability in many different request. This paper consist
eight distinct approaches to working capital management out of it first three gives
common guidelines next three regarding constrain set and cost balancing and last two
about probability models and portfolio theory.

Chakraborthy S. K. (1974) :-
In this research author try to make difference among cash working capital v/s balance
sheet working capital. And research is based on two dimensions. Fist is operating cycle
concept and second calculation of operating cycle period in all the four cases. Main aim
of this research is to exhibit operating cycle concept based on published annual report of
the firm.
Misra (1975):-
Here, in this analysis try to identify the problems of working capital in six public
enterprises for the period of 1960. Importance and findings are here under: selected
samples of companies were not able to utilize working capital efficiently. As well excess
inventory level which shows inappropriate management of inventory. In order delay
exchange was made to foreign exchange and issue of import license. Furthermore
account receivable ratio is very law because liberal credit policy and inappropriate
collection policy. In most of the selected firms were having huge cash amount on account
and improper management and control on cash. NatarajanSundar (1980) has been given
views on working capital is having immense important at both, the national as well
business level. To keep control on working capital at the national level by controlling
credit controls. In practice efficient working capital includes to determine the best
suitable level of working cpaital, financing it and control over it. If we talked about
corporate level investment is important in both case short term investment and fixed
assets. And that can be possible many company not surviving as well not incurring profit
because of not efficiently manage the working capital. Thus, cost management with

23
improved operational efficiency, and that aspect working capital is very important to be
manage in proper way.

Rajeshwar (1985):-
He has done the study on few selected public enterprises in India. He tried to check the
working capital policies adopted by the sample units. He made attempt to examine the
working capita components how efficiently managed. At the last no one company clearly
defined working capital polices and hence most of them could not achieve efficiency in
working capital management. In this study it is found that majority of investment was
made in finished goods inventory that was indicate that working capital was not managed
in planned way. Thus, study recommended for careful management of working capital in
finance management.

Rao K.V. and RaoChinta (1991):-

This study observed that strong and weak point of conventional techniques of working
capital analysis. Outcomes of this study shows that some of the conventional techniques
which could realized the working capital behavior well. And some of them fail to do so.
And thus authors suggest proper working capital management with conventional method
i.e. ratio analysis. Study suggests further inclusive factors which are decisive yardstick in
working capital efficiency.

Fazzari Steven M. and Petersen Bruce C. (1993) :-

Research has been put light on financial restrain on investment by giving focus the
ignoring role of working capital in both as use and source of funds. As per the views of
author liquidity can be maintain by maintaining working capital on smooth manner
means to be investment in a manner which does not create cash flow constrain. Through
the research found that working capital investment should be “excessively sensitive” with
summing up that controlling on smoothing working capital create a long term impact of
finance constraints and reported in many other studies also.

24
Siddharth and Das (1994):-
Siddharth and Das has been done study on “Working Capital Turnover in Pharmaceutical
companies” tried to determine efficient use of working capital in selected pharmaceutical
firms in India. 10 years data has been concluded that overall turnover ratio was 90.3 time.
the finely analysis of the data shows that the selected companies has done well in terms
of employment of working capital. Further more study discovered the working capital
turnover ratio cried off staidly over the stage from 1981 – 1990.

Vijayakumar and Venkatachalam (1995):-

This study was made on observed analysis in working capital and profitability. Study was
carried with 13 firms belonging sugar industry for the 10 years period from 1982-1983 to
1991-92. The correlation and regression statistical method has been used to analyze the
impact of working capital ratios on profitability. In this study total four ratios has been
taken in to consideration; Liquidity ratio, inventory turnover ratio, receivable turnover
ratio and cash turnover ratio. The discovery of the study said that liquid ratio and cash
turnover ratio have harmful impact on profitability on the other hand inventory turnover
ratio and receivables Have positive impact on profitability.

Rafuse (1996):-
The article stressed on working capital enhancement by halting payment of creditors.
That was clear many UK companied delayed payment for the long period. Very
surprisingly the story reveled in 1994 by the Forum for Private Business, that was a small
business association, and reverse side 50 days before payment of debtors were been paid
beyond the due date. This article stressed to maintain healthy and close relationship
among supplier and customer. The discovery of the study warranted the firms to reduce
inventory level as fast as possible in order to increase the profit of the firms. Another fact
of study was that control over working capital responsibility goes on the head of finance
manager.

25
 CHAPTER. 4
DATA ANALYSIS

26
 4. DATA ANALYSIS

4.1 Cash management

4.2 Cash flow of Bharti Airtel ltd
4.3 Profit and loss & balance sheet of Bharti Airtel ltd
4.4 Sources of finance of working capital
4.5 Ratio Analysis
4.6 Airtel 5G Network

27
 4.1 CASH MANAGEMENT
Cash is the important current asset for the operations of the business. Cash is the
basic input needed to keep the business running on a continuous basis It is
also the ultimate output expected to be realized by selling the service or
product manufactured by the firm. The firm should keep sufficient cash,
neither more nor less. Cash shortage will disrupt the firm’s operations while
excessive cash will simply remain idle, without contributing anything towards
the firm’s profitability. Thus a major function of the Financial Manager is to
maintain a sound cash position. Cash is the money which a firm can disburse
immediately without any restriction. The term cash includes currency and
cheques held by the firm and balances in its bank accounts. Sometimes near
cash items, such as marketable securities or bank time deposits are also
included in cash. The basic characteristics of near cash assets are that they can
readily be converted into cash. Cash management is concerned with managing
of:
1. Cash flows in and out of the firm

2. Cash flows within the firm

3. Cash balances held by the firm at a point of time by financing

deficit or inverting surplus cash.
Sales generate cash which has to be disbursed out. The surplus cash has to be
invested while deficit cash has to be borrowed. Cash management seeks to
accomplish this cycle at a minimum cost. At the same time it also seeks to
achieve liquidity and control. Therefore the aim of Cash Management is to
maintain adequate control over cash position to keep firm sufficiently liquid
and to use excess cash in some profitable way.
The Cash Management is also important because it is difficult to predict cash
flows accurately.Particularly the inflows and that there is no perfect
coincidence between the inflows and outflows of the cash. During some

28
periods cash outflows will exceed cash inflows because payments for taxes,
dividends or seasonal inventory buildup etc. On the other hand cash inflows
will be more than cash payment because there may be large cash sales and
more debtors’ realization at any point of time. Cash Management is also
important because cash constitutes the smallest portion of the current assets,
yet management’s considerable time is devoted in managing it. An obvious
aim of the firm now-a-days is to manage its cash affairs in such a way as to
keep cash balance at a minimum level and to invest the surplus cash funds in
profitable opportunities. In order to resolve the uncertainty about cash flow
prediction and lack of synchronization between cash receipts and payments,
the fir m should develop appropriate strategies regarding the following four
facets of cash management.
1. Cash Planning: - Cash inflows and cash outflows should be planned
to project cash surplus or deficit for each period of the planning
period. Cash budget should prepared for this purpose.
2. Managing the cash flows: - The flow of cash should be properly
managed. The cash inflows should be accelerated while, as far as
possible decelerating the cash outflows.
3. Optimum cash level: - The firm should decide about the appropriate
level of cash balances. The cost of excess cash and danger of cash
deficiency should be matched to determine the optimum level of cash
balances.
4. Investing surplus cash: - The surplus cash balance should be
properly invested to earn profits. The firm should decide about the
division of such cash balance between bank deposits, marketable
securities and inter corporatelending.
The ideal Cash Management system will depend on the firm’s products,
organization structure, competition, culture and options available. The task is
complex and decision taken can affect important areas of the firm.

29
Functions of Cash Management:
Cash Management functions are intimately, interrelated and intertwined
Linkage among different Cash Management functions have led to the
adoption of the following methods for efficient Cash Management:
 Use of techniques of cash mobilization to reduce operating
requirement of cash.
 Major efforts to increase the precision and reliability of cash forecasting.

 Maximum effort to define and quantify the liquidity reserve needs of the firm.

 Development of explicit alternative sources of liquidity.

 Aggressive search for relatively more productive uses for

surplus money assets.

The above approaches involve the following actions which a finance

manager has to perform
1. To forecast cash inflows and outflows

2. To plan cash requirements

3. To determine the safety level for cash.

4. To monitor safety level for cash

5. To locate the needed funds

6. To regulate cash inflows

7. To regulate cash outflows

8. To determine criteria for investment of excess cash

9. To avail banking facilities and maintain good relations withbankers

30
CASH MANAGEMENT: OBJECTIVES
The Basic objective of cash management are twofold: (a) to meet the cash
disbursement needs (payment schedule); and (b) to minimize funds
committed to cash balances. These are conflicting and mutually contradictory
and the task of cash management is to reconcile them.

Meeting the payments schedule: - A basic objective of the cash management is to

meet the payment schedule, i.e. to have sufficient cash to meet the cash
disbursement needs of the firm. The importance of sufficient cash to meet the
payment schedule can hardly be over emphasized. The advantages of adequate
cash are: (i) it prevents insolvency or bankruptcy arising out of the inability of
the firm to meet its obligations; (ii) the relationship with the bank is not
strained; (iii) it helps in fostering good relations with trade creditors and
suppliers of raw materials, as prompt payment may also help their cash
management; (v) it leads to a strong credit rating which enables the firm to
purchase goods on favorable terms and to maintain its line of credit with
banks and other sources of credit; (vi) to take advantage of favorable business
opportunities that may be available periodically; and (vi) finally the firm can
meet unanticipated cash expenditure with a minimum of strain during
emergencies, such as strikes , fires or a new marketing campaign by
competitors.

Minimizing funds committed to cash balances: - The second objective of cash

management is to minimize cash balances. In minimizing cash balances two
conflicting aspects have to be reconciled. A high level of cash balance will,
ensure prompt payment together with all the advantages, but it also implies
that large funds will remain idle ultimately results less to the expected. A low
level of cash balances, on the other hand, may mean failure to meet the
payment schedule, that aim of cash management should be to have an
optimal amount of cash balances.

31
 4.2 CASH FLOW OF BHARTI AIRTEL LTD
Rs (in Crores)

Particulars Mar'20 Mar'19 Mar'18 Mar'17 Mar'16

Profit Before Tax -51020.90 -5243.90 -681.20 -8509.50 10254.40

Net Cash Flow from Operating Activity 4026.40 10812.10 15954.30 21165.50 19449.90

Net Cash Used in Investing Activity -22271.50 -20455.90 -19441.60 -24283.20 -21989.30

Net Cash Used in Financing Activity 21114.10 9397.60 3867.70 3455.70 1898.40

Net Inc/Dec In Cash and Cash Equivalent 2869.00 -246.20 380.40 338.00 -641.00

Cash and Cash Equivalent - Beginning of the Year 170.70 416.90 82.20 -255.80 385.20

Cash and Cash Equivalent - End of the Year 3039.70 170.70 462.60 82.20 -255.80

32
4.3 BALANCE SHEET OF BHARTI AIRTEL LTD

Particulars Mar'20 Mar'19 Mar'18 Mar'17 Mar'16

12 12 12 12 12
Liabilities Months Months Months Months Months

Share Capital 2727.80 1998.70 1998.70 1998.70 1998.70

Reserves & Surplus 98347.20 96307.20 100862.20 99208.60 109730.4

0
Net Worth 101075.00 98305.90 102860.90 101207.30 111729.10

Secured Loan 82717.40 83752.50 -5244.90 -3483.00 .00

Unsecured Loan .00 .00 67781.00 60372.90 42156.90

TOTAL LIABILITIES 183792.40 182058.40 165397.00 158097.20 153886.00

Assets

Gross Block 233712.00 200317.0 180754.60 163428.0 137060.8

0 0 0
(-) Acc. Depreciation 72032.70 66505.10 58145.20 51905.20 45135.30

Net Block 161679.30 133811.90 122609.40 111522.80 91925.50

Capital Work in Progress 1258.70 5636.50 5542.70 9600.20 3830.30

Investments 38726.80 37579.80 48128.20 45959.00 69897.30

Inventories 3.10 1.00 6.30 3.90 5.30

Sundry Debtors 3810.00 3840.30 4319.60 3211.80 3172.40

Cash and Bank 3397.60 235.30 545.10 173.40 46.60

Loans and Advances 91497.30 41802.70 23786.00 21166.50 16150.60

Total Current Assets 98708.00 45879.30 28657.00 24555.60 19374.90

Current Liabilities 75629.50 40547.60 39231.10 33178.30 30800.80

Provisions 40950.90 301.50 309.20 362.10 341.20

Total Current Liabilities 116580.40 40849.10 39540.30 33540.40 31142.00

NET CURRENT ASSETS -17872.40 5030.20 -10883.30 -8984.80 -11767.10

Misc. Expenses .00 .00 .00 .00 .00

TOTAL
ASSETS(A+B+C+D+E) 183792.40 13832058. 165397.00 158097.20 153886.00
40
 PROFIT AND LOSS OF BHARTI AIRTEL LTD

PARTICULAR Mar'20 Mar'19 Mar'18 Mar'17 Mar'16

12Months 12Months 12Months 12Months 12Months

INCOME:

Sales Turnover 54317.10 49606.00 53663.00 62276.30 60300.30

Excise Duty .00 .00 .00 .00 .00

NET SALES 54317.10 49606.00 53663.00 62276.30 60300.30

Other Income 2242.5000 2632.7000 235.6000 184.3000 172.9000

TOTAL INCOME 56559.60 52238.70 53898.60 62460.60 60473.20

EXPENDITURE:

Manufacturing Expenses 27958.30 29321.40 27408.60 29528.10 28776.00

Material Consumed .00 .00 .00 .00 .00

Personal Expenses 1520.20 1471.00 1720.90 1738.50 1864.80

Selling Expenses 479.10 537.40 578.70 720.00 748.50

Administrative Expenses 4225.90 5989.80 6149.90 6596.80 6599.80

Expenses Capitalised .00 .00 .00 .00 .00

Provisions Made .00 .00 .00 .00 .00

TOTAL EXPENDITURE 34183.50 37319.60 35858.10 38583.40 37989.10

Operating Profit 20133.60 12286.40 17804.90 23692.90 22311.20

EBITDA 22376.10 14919.10 18040.50 23877.20 22484.10

Depreciation 20392.10 15120.20 13048.60 12203.40 9575.30

34
Other Write-offs .00 .00 .00 .00 .00

35
EBIT 1984.00 -201.10 4991.90 11673.80 12908.80

Interest 11463.10 7847.70 5069.00 2912.50 1974.50

EBT -9479.10 -8048.80 -77.10 8761.30 10934.30

Taxes -14932.70 -3374.70 -760.40 1416.10 2474.10

Profit and Loss for the Year 5453.60 -4674.10 683.30 7345.20 8460.20

Non Recurring Items -41548.80 2814.50 -598.40 -17273.30 -683.30

Other Non Cash Adjustments .00 .00 .00 .00 .00

Other Adjustments 7.00 -9.60 -5.70 2.50 3.40

REPORTED PAT -36088.20 -1869.20 79.20 -9925.60 7780.30

KEY ITEMS

Preference Dividend .00 .00 .00 .00 .00

Equity Dividend .00 1998.80 463.60 253.80 887.20

Equity Dividend (%) .00 100.00 23.20 12.70 44.39

Shares in Issue (Lakhs) 54555.57 39974.00 39974.00 39974.00 39974.00

EPS - Annualised (Rs) -66.15 -4.68 .20 -24.83 19.46

Rs (in Crores)

36
4.4 SOURCES OF FINANCE FOR WORKING CAPITAL

The sources of finance for working capital may fall into four categories, namely:

1) BANK FINANCE

2) COMMERCIAL PAPER

3) FIXED DEPOSITS

4) INTER CORPORATE DEPOSITS.

The relative importance of these sources from country and from time to time
depending on the environment. In India, the primary sources for financing
working capital are trade credit and short term bank credit. According to an
estimate, both these sources together finance about three fourth of the
working capital requirements of the industry:

1. BANK FINANCE
It is the primary institutional source for working capital finance. To obtain
short- term bank credit, working capital requirements have to be estimated by
the borrowers, and the banks are approached with the necessary supporting
data. The banks determine the maximum credit based on the margin
requirement of the security. The margin represents a percentage of the value
of the asset offered as security by the borrower. The margin is based on the
nature of goods and is laid down by the Reserve Bank of India. It is changed
from time to time to suit the requirements of the banker; the borrower draws
funds periodically.

37
FORMS OF BANK FINANCE

Working capital advance is provided by the commercial banks in three primary ways:

i) Cash credits/overdrafts

ii) Loans

iii) Purchase/Discount of bills.

In addition to these forms of direct finance, commercial banks help their

customers in obtaining credit from other sources through the letter of credit
agreement.
1. Cash credits/overdrafts

Under a cash credit or overdraft agreement, a predetermined limit for

borrowing is specified by the bank. The borrower can draw as often as
required, provided the outstanding do not exceed the cash credit/overdraft
limit. The borrower also enjoys the facility of repaying the amount fully or
partially, as and when he desires. Interest is charged only on the running
balance, and not on the limit sanctioned. A minimum charge may be payable,
irrespective of the level of borrowing, for availing this facility. This form of
advance is highly attractive from the borrower’s point of view because while
the borrower has freedom drawing the amount in installments as and when
required, interest is payable only on the amount actually outstanding.
2. Loans

These are advances of fixed amounts, which are credited to the current
account of the borrower or released to him in the form of cash. The borrower
is charged with interest on the entire loan amount, irrespective of how much
he withdraws. In this respect this system differs markedly from the overdraft
or the cash credit arrangement wherein interest is payable only on the amount
actually utilized. Loa ns are supported by a demand promissory note executed
by the borrower. There is often a possibility of renewing the loan.

38
 3. Purchase / Discount of bill

A bill arises out of a trade transaction. The seller of goods draws the bill on the
supported by a document of the title of goods like a railway receipt or a bill of
lading) and may be payable on demand or after absence period which does
not exceed 90 days. On acceptance of the bill by the purchaser, the seller
offers it to the bank for discount/purchase. When the bank
discounts/purchases the bill it releases the funds to the seller. The bank
presents the bill to the purchaser on the due date and gets its payment.
The Reserve Bank of India launched the new market scheme in 1970 to
encourage the use of bills as an instrument of credit The objective was to
reduce the reliance and the cash credit arrangement because of its amenability
to abuse. The new bill market scheme sought to promote an active market for
bills as a negotiable instrument so that the lending activities of a bank could
be share by other banks. It was envisaged that a bank, when short of funds,
would sell or rediscount the bill that it has purchased or discounted. Likewise,
a bank, which has surplus funds, would invest in bill. Obviously, for such a
system to work there has to be a lender of last resort which can come to the
succor of the banking system as a whole. This role naturally has been assumed
by the Reserve Bank of India,which rediscounts the bills of commercial banks
up to a certain limit.
SECURITY

For working capital advances, commercial banks seek security either in the
form of hypothecation or in the form of pledge.
HYPOTHECATION

Under this agreement the owner of the goods borrows money against the
security of movable property, usually inventories. The owner does not part
with the possession of property. The rights of the lender (hypothecatee)

39
depend on the agreement of the lender and the borrower. Should the borrower
default in paying his dues, the lender can file a suit to realise his dues by sale
of the goods hypothecated.
PLEDGE

In a pledge agreement, the owner of the goods (pledgor) deposits the goods
with the lender (pledgee) as security for the borrowing. Transfer of possession
of goods is a precondition for pledge. The lender is expected to take
reasonable care of goods pledged with him. The pledge contract gives the
lender the right to sell the goods and recover dues, should the borrower
default in paying debt.

(2) COMMERCIAL PAPER

Commercial paper represents short-term unsecured promissory notes issued by firms,

which enjoy a fairly high credit rating. Generally, large firms with considerable financial
strength are able to issue commercial paper. The important features of commercial paper
are as follows
 The maturity period of commercial paper mostly ranges from 90 to
150 days. Commercial paper is sold at a discount from its face value
and redeemed at its face value. Hence the implicit interest rate is a
function of the size of the discount and the period of maturity.
 Commercial paper is either directly placed with the investors or sold
through the dealers.

(3) FIXED DEPOSIT/PUBLIC DEPOSIT

Many firms, large and small, have solicited unsecured deposits from the
public in the recent years, mainly to finance their working capital
requirements.

40
Company’s Point of View — Public deposits offer the following
advantages to the company:
 The procedure for obtaining public deposits is fairly
simple.
 No restrictive covenants are involved.
 No security is offered against public deposits. Hence the
mortgageable assets of the firm are conserved.

(4) INTER- CORPORATE DEPOSITS

A deposit made by one company with another, normally for a period up to six months, is
referred to as an inter-corporate deposit. Such deposits are usually of three types. They
are as follows:
Call deposits

In theory, a call deposit is withdraw able by the lender on giving a day notice.
In practice, however, the lender has to wait for at least three days. The interest
rate on such deposits may be around 14 per cent per annum.
Three-months Deposits

More popular in practice, these deposits are taken by borrowers to tide over a
short- term cash inadequacy that may be caused by one or more of the
following factors: disruption in production, excessive import of raw material,
tax payment, delay in collection, dividend payment and unplanned capital
expenditure. The interest rate on such deposits is around 16 per cent per
annum.
Six-months Deposits

Normally, lending companies do not extend deposits beyond this time frame.
Such deposits, usually made with first class borrowers, carry an interest rate
of around 18 per cent per annum.

41
 4.5 RATIO ANALYSIS

KEY FINANCIAL MAR 20 MAR 19 MAR 18 MAR 17 MAR 16

RATIOS OF
BHARTI AIRTEL (in
Rs. Cr.)
PER SHARE RATIOS

Basic EPS (Rs.) -71.08 -4.36 0.20 -24.84 19.46

Diluted EPS (Rs.) -71.08 -4.36 0.20 -24.84 19.46

Cash EPS (Rs.) -28.77 33.15 32.84 5.70 43.42

Book Value 185.27 245.92 257.32 253.18 279.50

[ExclRevalReserve]/S
hare (Rs.)

Book Value 185.27 245.92 257.32 253.18 279.50

[InclRevalReserve]/S
h are (Rs.)

Dividend / Share(Rs.) 2.00 2.50 5.34 1.00 1.36

Revenue from 99.56 124.10 134.24 155.79 150.85

Operations/Share
(Rs.)

PBDIT/Share (Rs.) 41.01 37.32 45.13 59.73 56.25

PBIT/Share (Rs.) 3.64 -0.50 12.49 29.20 32.29

PBT/Share (Rs.) -93.52 -13.12 -1.70 -21.29 25.65

Net Profit/Share (Rs.) -66.15 -4.68 0.20 -24.83 19.46

PROFITABILITY
RATIOS

PBDIT Margin (%) 41.19 30.07 33.61 38.34 37.28

42
PBIT Margin (%) 3.65 -0.40 9.30 18.74 21.40

PBT Margin (%) -93.93 -10.57 -1.26 -13.66 17.00

Net Profit Margin (%) -66.43 -3.76 0.14 -15.93 12.90

Return on Networth -35.70 -1.90 0.07 -9.80 6.96

/ Equity (%)

Return on Capital 0.95 -0.12 3.09 7.49 4.94

Employed (%)

Return on Assets (%) -12.01 -0.83 0.03 -5.17 4.20

Total Debt/Equity (X) 0.81 0.85 0.61 0.56 0.38

Asset Turnover Ratio 18.08 22.25 26.18 32.49 32.58

(%)

LIQUIDITY RATIOS

Current Ratio (X) 0.63 0.32 0.49 0.47 0.41

Quick Ratio (X) 0.63 0.32 0.49 0.47 0.41

Inventory Turnover 17,521.6 49,606.0 8,517.94 15,968.2 11,377.4

Ratio (X) 5 0 8 2

Dividend Payout 0.00 -106.93 1,261.74 -4.02 11.40

Ratio (NP) (%)

Dividend Payout 0.00 15.08 7.61 17.54 5.11

Ratio (CP) (%)

Earnings Retention 0.00 206.93 - 104.02 88.60

Ratio (%) 1,161.74

Cash Earnings 0.00 84.92 92.39 82.46 94.89

Retention Ratio (%)

43
VALUATION RATIOS

Enterprise Value 319,339. 216,590. 221,447. 196,605. 182,379.

(Cr.) 34 65 29 51 07

EV/Net Operating 5.88 4.37 4.13 3.16 3.02

Revenue (X)

EV/EBITDA (X) 14.27 14.52 12.28 8.23 8.11

MarketCap/Net 4.43 2.68 2.97 2.25 2.33

Operating Revenue
(X)

Retention Ratios (%) 0.00 206.93 - 104.02 88.59

1,161.74
Price/BV (X) 2.38 1.35 1.55 1.38 1.26

Price/Net Operating 4.43 2.68 2.97 2.25 2.33

Revenue

Earnings Yield -0.15 -0.01 0.00 -0.07 0.06

44
4.6 AIRTEL 5G NETWORK

Airtel on Thursday announced that it has become the country’s first telcom to
successfully demonstrate and orchestrate live 5G service over a commercial network in
Hyderabad city. Airtel noted that it did this over its existing liberalised spectrum in the
1800 MHz band through the NSA (Non Stand Alone) network technology. The telco
further noted that it used a "first of its kind, dynamic spectrum sharing to operate 5G and
4G concurrently within the same spectrum block." This demonstration has emphatically
validated the 5G readiness of Airtel’s network across all domains - Radio, Core and
Transport.

Airtel claims that 5G will be capable of delivering 10x speeds, 10x latency and 100x
concurrency when compared to existing technologies. It noted that in Hyderabad, users
were able to download a full length movie in a matter of seconds on a 5G phone, a
demonstration which has underlined the company’s technology capabilities. The full
impact of the 5G experience, however, will be available to Airtel's customers, when
adequate spectrum is available and government approvals are received. users will not be
required to switch SIM cards when the network is available for them.

Gopal Vittal, MD & CEO, Bharti Airtel in a statement said, “I am very proud of our
engineers who have worked tirelessly to showcase this incredible capability in Tech City,
Hyderabad today. Every one of our investments is future proofed as this game changing
test in Hyderabad proves. With Airtel being the first operator to demonstrate this
capability, we have shown again that we have always been the first in India to pioneer
new technologies in our quest for empowering Indians everywhere.”

“We believe India has the potential to become a global hub for 5G innovation. To make
that happen we need the eco system to come together applications, devices and network
innovation. We are more than ready to do our bit,” he added.

45
How fast is Airtel 5G and when can you get it?
Airtel claims its new 5G network is capable of “delivering 10x speeds with 10x latency
and 100 x concurrency compared to existing technologies.” Speaking about the new 5G
demonstration conducted in Hyderabad, Airtel shared that users were able to download a
full-length movie in seconds on a 5G-enabled smartphone.

“The full impact of the 5G experience will be available to our customers, when adequate
spectrum is available and government approvals received,” shared Airtel

46
 CHAPTER. 5
SWOT ANALYSIS

47
SWOT ANALYSIS

 Strength
 Airtel is one of the leading telecommunication companies with a rich experience of
more than 19 years in INDIA and African Sub-continent which provides telecom
and broadband services. Its presence is in nearly 20 countries and is the 3 rd largest
telecom operator overseas.
 Indian Telcom which initially had eight players squeezed to three Bharti Airtel,
Vodafone-Idea and Reliance Jio owing approximately equal share in the pie.
 With the formation of Indus tower & due to its venture with Idea-Vodafone, the
infrastructure of Airtel has extended in all the country resulting in nationwide
penetration with superior services.
 Having an alliance with brands like SONY Ericson, Singtel, Apple and Nokia the
brand equity has been boosted.
 Very Strong and trustworthy Dealer and Distributor’s network which helps in
generating revenues from the market.
 Airtel is having a team of skilled people and guided with the vision of their CEO
Mr. Mittal. The workforce is trained by and their skills are enlightened through
regular training sessions which help to achieve the vision of the group.
 Diversification is one of the biggest strengths of Airtel – Airtel is building its strong
BRAND portfolio by diversification, over the years Airtel has diversified into digital
payments, IP TV services, DTH, securities, etc.
 Airtel has a successful track record over the years due to competition its revenues
and profit margins have gone down but still, the cash flows are quite impressive
over its competitors.
 Airtel recently introduced a seamless digital platform that bundles all its offerings
under a single bill which acts as strength

48
  Weekness

 Average Revenue Per Unit (ARPU) is shrinking day by day due to competition in
the limited market.
 Outsourcing of operations increased dependency on other companies
 Struggling to recover $9 billion invested in African sub-continent business, despite
being a market where the Average Revenue Per Unit is good.
 The group is in heavy debt due to its acquisitions turning out to some bad
investment, and debt being high with lower margins. Airtel does not have a very
strong financial support system compared to its competitors.
 Changing Technology is increasing the cost of new infrastructure.
 New government policies and Regulatory frameworks ordered by the TRAI is a
challenge
 The attrition rate in Airtel is very high compared to industry standards. The cost of
training and development of employees is also a huge cost to the company.

 Opportunity

 Due to the competition in the urban market and shirking profitability, they should
focus on the untapped rural market as it will be a very good opportunity to increase
their revenue.
 Collaborating with smartphone companies and providing schemes to hem will be a
smart move. This will ensure fixed revenues in the future and with a
higher customer base.
 Value-added services if the future of the industry and by the introduction of the
services the ARPU will rise and attract customers who are capable to pay.
 The wireless world is moving towards LTE (long term evolution or 4G). LTE
services for mobile broadband will be a good solution for India where fixed
broadband penetration is low in the market. Airtel is leading with this version of
LTE in metro cities, but deployment needs to catch up pace. Despite a weak LTE
network in India they should work and embrace the services.

49
 With changing consumer needs and behavior, diversification is required into
Ecommerce, payment banks, and new product categories.
 New taxation policies with a reduction in corporate taxes will significantly increase
the profit margins.
 Investment in Broadband services and are in the task of bringing 5G to the end
customers.
 Planning to introduce Customer 360, a database of all customer information, would
be carried by Airtel.

 Threat

 An increase in the cost of technology and employees are affecting the profit
margins.
 Cutthroat competition in the market with other players has affected the margins
over the last 2-3 years.
 Competitors are paying higher margins to their Dealer/Distributor networks to
increase their sales/revenues.
 Inappropriate services provided are upsetting customers and encourage them to shift
to their competition via Mobile Number Portability.
 Diminishing the use of landlines in the region affecting the revenues as the users of
wireless/smartphones has increased significantly.

50
 CHAPTER.6
LIMITATION OF THE STUDY

51
 Limitation of the study

The following are some of the anticipated challenges that the researcher is likely to face in
the due course of the study.

 We make our project on the basis of the data provided but we actual can’t meet
the people concern who has provided it, personally and get the data.
 It is difficult to get accurate data
 Even if we get to meet them, there are less chances to get accurate data coz its
against the protocol to share internal information.
 The study is restricted to last 5 years data.
 Because it is difficult to study and analize 25 years old data
 The study completely based on secondary data and the accuracy of the analysis
depends on the data obtained.
 Due to contraints of time and resources, the study is likely to suffer from
certain limitations.
 Data collected from different sites and books can be false as now-a-days false
data as been put on the official site just to show less profit and save tax.
 There is more chance that company has manipulated the balance sheet and
profit and loss

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FINDINGS AND CONCLUSION

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 FINDINGS

1. Bifurcation of credit limits:

Bifurcation of cash credit limits into a demand loan portion and a fluctuating cash
credit component has not found acceptance either on the part of the banks or
the borrowers. Such bifurcation may not serve the purpose of better credit
planning by narrowing gap between sanctioned limits and the extent of
utilization thereof.
2. Reduction in over dependence on bank finances

The need for reducing the over dependence of the medium and large borrowers
both in private and public sectors on bank finance for their production /
trading purposes is recognized. The net surplus cash generation on established
industrial unit should be utilized partly at least for reducing borrowing for
working capital purposes.
3. Increase in owner’s contribution

In order to ensure that the borrowers do enhance their contributions working

capital and to improve their current ratio, it is necessary to place them under
the second method of sending recommended by hand on committee which
would give a minimum current ration of 1.33:1. As many of the borrowers
may not be immediately in a position to work under the second method of
lending the excess borrowings should be segregated and treated as working
capital term loan which should be made repayable loan, it should be charged
at higher rate of interest.
4. AD-HOC or temporary Limits

Borrowers should be discouraged from approaching banks frequently for ad- hoc
or temporary limits in excess of sanctions and limit to meet unforeseen
contingencies.
Banks should charge additional interest of 1% pa over normal rate on these

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 5. Temporary Accommodation through loan

If any ad-hoc or temporary accommodation is req. in excess of the sanctioned

limit to meet unproven contingencies the additional finance should be given,
where necessary, through a separate demand loan A/C
Or a separate non-operable cash Cr. A/C. There should be a stiff penalty for
such demand loan or non-operable cash cr. Portion, ablest 2% above the
normal rate unless the RBI exempts such penalty. The discipline may be
made applicable in cases involving working capital limits of Rs. 10 lacs and
above.
6. Penal Information

The borrower should be asked to give his quarterly requirements of funds

before the commencement of the quarter on the basis of his budget, the actual
requirements being within the sanctioned limit for the particular peak
level/non-peak level periods. Drawings of less than or in excess of the
operative limit so fined (with a tolerance of 10% either way) but not
exceeding the sanctioned limit would be subject to a penalty to be fined by
the RBI from time to time. For the time being, the penalty may be fixed at
2%
p.a. The borrower would be required to submit his budgeted requirements in
triplicate & a copy of each would be sent immediately by the branch to the
controlling office and head office for record. The penalty would be applicable
only in respect of parties enjoying cr. Limits of Rs. 10 lacs and above subject
to certain exemptions.

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 7. Info. Systems

The non-submission of the returns in time is partly due to certain features in the
forms themselves. To get over this difficulty, simplified forms have been
proposed. As the quarterly info. System is part and parcel of the revised style of
lending under the cash cr. System, I the borrower does not submit the return
within the prescribed time, and he should be penalized by charging the whole
outstanding in the A/C at a penal rate of mt., 1% p.a. more than the contracted
date for the advance from the due date of the return till the date of its actual
submission

After completing this project it can now be concluded that an after great
effect on Airtel. Working Capital (Airtel) to very important in which have
higher unit value.

After doing my survey I have concluded that most of the consumer prefers to
buy because Airtel give the excellent after sale service than any other brand.
and their after sale service is also very good. But beside these points I have
concluded on my survey that sharp give the better after sale service than any
brand. Airtel give the prompted after sale service than any other company
most of the customer are satisfied with the after sale service of Airtel and
attitude of compliant handler is very sensitive.

8. Prime lending rate:

The RBI had given the total freedom of changing the rate of interest on the
amount of credit facilities, which are extended by it. The banks has now been
advised to stick to concept of PLR, which is the minimum rate of interest,
which every bank can charge from its clients and constituents. It keeps on a
changing as per the direction of RBI. Factors taken into consideration which
fixing actual ROI:

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a. The project / product

b. The promoter

c. The prospects

d. The performance of the group co.

e. Promoters contribution in the project.

f. The structural ratios like the debt equity ratio.

g. The earlier operation of the a/c.

h. The submission of QIS

i. The timely submission of the production/sales figure etc.

j. The difference between actuals and projections

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 CONCLUSION

In the analysis for Bharti Airtel ltd, a Bharti Group Company it is found that the working
capital has increased which could be mainly due to increased sales. The Gross Operating
Cycle declined significantly but the reduction in inventory conversion period. This is why
we see that Net operating Cycle for last two years is almost identical. The main areas of
emphasis were work in progress conversion period and creditors conversion period.
Debtors conversion period reduced but work in progress and creditors conversion period
increased.
Moreover, the interest and concentration of Bharti Airtel ltd has entirely shifted to 5G
network in india.
Few suggestions that are recommended for better management of working capital are
reducing inter-corporate deposits and loans, reducing finished goods inventory, increment
in creditors payment period etc.
Thus, Good management of working capital is part of good financial management. Effective
use of working Capital will contribute to the operational efficiency of a company,
optimum use will help to generate maximum returns.

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SUGGESTIONS & RECOMMENDATIONS

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 SUGESSTION

 First of all company must provide all its dealers and retailers to all sort of
promotion equipment such as glow sign board, banner, pum plates etc. in time so
that they increase their sales which is benefited both retailer as well as company.
 Few outlets are unaware about scheme so proper communication is necessary
between distributor and retailers.
 Number of hoarding should be increased
 Company should be lenient in ID verification procedure.
 To increase the consumer as on network, company should make changes in its
FRC plan for example the talk value should be divided in two parts 50% of talk
value should provide at the time of activation and rest T.T provide after gap of
some days.
 Company should make understand its retailers about the benefits of consumer as
on network.
 Company should give extra return and other bonus, gifts to its relatives so they
put their full efforts to increase the Airtel sales.
 Company should motivate its sales staff so they will pay more concentration in
sales and activation of new connections.
 Company should make some necessary changes in its FRC plan. For example
company should divide the talk time in to two times ( 50% at the time of
activation + 50% after 15 days).

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 RECOMMENDATIONS

The study conducted on working capital management of Bharti Airtel shows the
evaluation of management performance in this regard. Major findings and
suggestions thereon are narrated as under:
 Current assets comprise/a significant portion of total investment in
assets of the company. There is fluctuating and rather increasing trend
of this ratio during the period which shows management in-efficiency
in managing working capital in relation to total investment. Further
current assets to fixed assets ratio also shows on fluctuating trend
during the study period which substantiate above mentioned criterion
of in-effectiveness in management of working capital by the company.
 Assets turnover ratio for the given years of study shows stagnant
trend which is due to significant increase in sales.The ratio used for
analysis of liquidity position is current ratio and quick ratio. This
ratio reveals that company has sound liquidity position throughout the
period of study. Company should maintain significant balance in
terms of resources to improve these ratios.
 Inventory turnover ratio depict the fluctuating trend which indicates
the accumulation of inventory in turn which cause loss to the
company by way of deterioration of stock, interest loss on blockage
of stock etc. Further composition of inventory reveals that portion
of individual element of inventory has fluctuating trend which
indicates that management has no policy in respect of inventory
management.
 Debtors Turnover ratio reveals a decreasing trend during the period of
study and average collection period ranges have not improved. It
reveals that management has no specific policy in respect of debtor’s
management.

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 BIBLOGRAPHY

 BOOKS

• Khan M.Y. and Jain P.K., Financial Managemen

• Dalal Street Journal

• Annual Report – Bharti Airtel

• Financial Express

• Seth, A.K., (2003); International Financial Management

• Vij, Madhu, (2002); Multinational Financial Management

• Apte, P.G., (2003); International Financial Management

• Rajwade, A.V., (2003); Foreign Exchange International

Finance and Risk Management
• Avadhani, V.E., (2003); Global Business Finance

• Majumdar, Bhaskar, (2002); Concept and Practice of Global Finance

• Global Trade And Investment Finance – Lawrence Tuller

• Corporate Finance IMT Gaziabad

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 WEBSITE:

• www.airtelindia.in

• http://bhartiairtel.in/index.php?id

• http://bhartiairtel.in/index.php?id

• http://bhartiairtel.in/index.php?id

• http://bhartiairtel.in/index.php?id
=company_profile

• http://economictimes.indiatimes.c
om/bharti-
• http://www.moneycontrol.com/-
• http://www.moneycontrol.com/financials/bhartiairtel/
financial- graphs/operating-profit-ebitda-
percentage/BA08
http://www.indianotes.com/research--

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