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Financial Performances Of Bharti Airtel) And Idea Cellular Cod (Idea)

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Introduction and Overview

This is a comparison analysis of the financial performances of two companies Bharti Airtel Ltd (Airtel) and Idea Cellular Ltd (Idea). Both the companies belong to telecommunication industry, and are two of the largest telecommunication providers in India. A brief overview of the two companies is as follows:
Bharti Airtel Ltd - Airtel is one of the world’s largest telecommunication service providers with presence in 19 countries. It is listed on both BSE (532454) and NSE (BHARTIARTL). It has a market capitalization of Rs. 147,864 cr. and face value of Rs. 5.
Idea Cellular Ltd – Idea Cellular is a leading GSM service provider in India with a customer base of over 72 million. Idea has a market capitalization of Rs. …show more content…
is 60% while that for Idea Cellular Ltd. is 30%. This shows that the shareholders of Bharti Airtel Ltd. received more dividend at the amount invested in Bharti Airtel Ltd. as compared to the shareholders of Idea Cellular Ltd.

Price per book value – The price per book value for Bharti Airtel Ltd. is 1.9 and that for Idea Cellular Ltd. is 2.9. This ratio indicates that amount that the shareholders are paying (market price) for the net assets (total assets less outsiders’ liabilities) of the company. From the above ratio, it is clear that the shareholders are paying more amount for the net assets of Idea Cellular Ltd. than that of Bharti Airtel Ltd.

Activity Ratios

Total Asset Turnover – The total asset turnover ratio measures the ability of a company to use its assets to efficiently generate sales. The total asset turnover for Bharti Airtel Ltd. is 0.632 and Idea Cellular Ltd. is 0.776. The lower the total asset turnover ratio for the firm signifies that the firm’s sales are sluggish.

Capital Turnover – The capital turnover ratio for Bharti Airtel Ltd. is 0.844 and Idea Cellular Ltd. is 0.937. This means that Idea Cellular Ltd. is able to better deploy its capital to generate more sales per rupee of capital employed invested in the company as compared to Bharti Airtel Ltd. APPENDIX

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