Research Report on Bharti Infratel Ltd

Table of Content

1.) Company overview

2.) Shareholding pattern of the company
3.) Management of the company
4.) SWOT Analysis of company
5.) Financial Analysis of company
6.) Competitive Analysis of company
7.) Impact of Covid-19 on the company
8.) Conclusion
Company overview

Bharti Infratel Ltd. was established on November 30, 2006 as a public limited
company. It is listed both on Bombay stock exchange and National Stock
Exchange. It has registered office in Gurugram. It is a provider of tower and
related infrastructure, and deploys, owns and manages telecom towers and
communications structures for various mobile operators. The company’s
consolidated portfolio consist of over 90,000 telecom towers, which includes over
38,997 of its own towers and the balance from its 42% equity interest in Indus
Towers Ltd. and has a presence in all 22 telecom circles in India. The services
offered by the company include tower infrastructure solutions, tower operations
center, Infratel enterprise suite and advantage Infratel. They have towers across 18
states.

They are one of the world’s largest telecom tower infrastructure providers that
deploy, own and manage telecom towers and communication structures for all
wireless operators. Bharti Infratel's core mission is in line with the Bharti Group's
philosophy of building businesses which positively impact the society we live in.

Their vision is:

“To be the Best and most Innovative passive communications infrastructure

provider globally”

Bharti Infratel was awarded under the category Telecom Equipment and Infra
Services at Dun & Bradstreet Corporate Awards 2019 held in Mumbai on May 29,
2019. Dun & Bradstreet Infra Awards recognize and felicitate India's leading
infrastructure company who has delivered exemplary performance in the industry
over the past year.
Shareholding pattern of the company

Shareholding pattern of the company is as follows:

Holder's Name No of Shares

No of Shares 1849608246
Promoters 989780979
Foreign Institutions 777354226

Banks and Mutual Funds 35249739

Others 8062528

General Public 7377382

Financial Institutions 31045415

GDR 737977

% Share Holding

Promoters
2% 0% 0% 2% 0%
Foreign Institutions
Banks and Mutual Funds
Others
42% General Public
54%
Financial Institutions
GDR

The majority stack of the company is with the promoters which shows the
confidence of the promoters in the company and it is a positive indicator for the
investors of the company.
Source: Economic Times

Management of the company

Bharti Infratel ltd. was founded by Sunil Bharti Mittal. The board of Directors of
this company consists of Mr. Akhil Gupta as the Chairman of the company, Mr.
Devender Singh Rawat as the CEO and MD of the company, with six independent
and non-executive directors and one non independent and non-executive director.

Now let’s talk about these key people individually:

Sunil Bharti Mittal: He is an Indian billionaire entrepreneur, philanthropist and the

founder and chairman of Bharti Enterprises, which has diversified interests in
telecom, insurance, real estate, education, malls, hospitality, Agriculture and food
besides other ventures. Bharti Airtel, the group's flagship company is one of the
worlds largest and India's second-largest telecom company.

Akhil Gupta: He is the Vice Chairman of Bharti Group and Executive Chairman of
Bharti Infratel Limited. He has played a pivotal role in Bharti’s phenomenal
growth right since inception. He is currently the Chairman of TAIPA (Tower and
Infrastructure Providers Association) and President of TSSC (Telecom Sector Skill
Council). He is a Chartered Accountant by qualification with over 30 years of
professional experience. He has also done an “Advanced Management Program” at
the Harvard Business School in the year 2002.

Devender Singh Rawat: D S Rawat is the Managing Director and CEO of the
Company. He is part of the Company since 2010. He is also a member of the
Executive Council Committee of Tower and Infrastructure Providers Association
(TAIPA) and the Northern Regional Council of Confederation of Indian Industry
(CII). He is an engineering graduate in Electronics & Communications.
SWOT Analysis of company

STRENTH:

1. Reduced Capital
2. Faster Time-to-Market
3. Operational efficiencies
4. Revenue maximization

WEAKNESSES:

1. Decline in net profit quarter on quarter.

2. High Debt on company

OPPORTUNITIES:

1. The Scope of expansion is huge.

2. The demand in future is going to increased as it has not covered the entire
market
3. In developing countries like India, where there are projects like smart cities
which increases the demand of their product

THREATS:

1. Threat of huge competition

2. It is capital intensive sector
3. It needs a regular upgrade
Financial Analysis of company

Under this analysis I will try to cover the financial and fundamental position of the
company:

ROE 23.50%
ROA 17.69%
EPS 17.84
BVPS 73.22
PE Ratio 22.28
Deliverables 10.06

It is among the top three cement company of India. The ROE, ROA EPS and
BVPS of the company are indicating positive signals when compared to the
industry returns.

The PE Ratio of the industry is 20.70% but the company PE is slightly higher than
the industry which shows that stock is little overvalued but returns are good on the
stock investor can invest in the stock.

Deliverables are very low which indicates that it is a speculative script, which
makes this stock volatile and it is actually not a good sign for the long term
investors.

The majority stake is taken up by the promoters which show the confidence of
promoters in company.

The Debt of the company is not very high, which shows that shareholders money is
safe in case company goes bankrupt.
The Revenues and net margins of the company are mentioned below:

Revenue Growth Chart of the company:

Revenues ( in billion)
80
66.21 68.26 67.43
70 60.85
60 55.58 Revenues ( in billion)
50 Linear (Revenues ( in
40 billion))
30
20
10
0
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Net Margin of the Company

Net Margin( in %)
60.00%
49%
50.00% 45%
40% 38%
40.00% 37%
Net Margin( in %)
30.00%
20.00%
10.00%
0.00%
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

The revenues of the company are growing year on year and net margin is also
showing good picture of the company.

With the above data we can conclude that this Company is financially and
fundamentally very strong.

Source: Webull.com and moneycontrol.com

Competitive Analysis of company

This sector is very competition intensive sector. There are almost 70-75 listed
companies in this sector. It is very capital intensive and technology driven sector.

The major competitors of Bharti Infratel Ltd are:

1. ITI Ltd.

2. HFCL Ltd.

3. AGC Network Ltd.

4. Astra Microwave Products Ltd.

These companies are very strong competitors of Bharti Infratel Ltd.

ITI Ltd. is engaged in manufacturing, trading and servicing of telecommunication

equipment and rendering other associated and ancillary services. The company
focuses on offering telecom services. Its products includes global system for
mobile, communication code division multiple access, defense products and
diversified product.

HFCL Ltd. is an Indian based company that operates as designer, Manufacturer,

assembler and seller of telecommunication equipment. It manufactures
equipments, such as modems, integrated digital network system, etc. It also sells
various types of electronic/ electric, mechanical appliances, instruments,
equipments or products.

AGC network Ltd is engaged in other telecom activities. The company is in

information and communication technology solution provider and integrator. The
company offers services across the lifecycle of a solution, spanning pre-
implementation assessment, upgrade and enterprise integration and managed
services.

Astra Microwave Products Ltd. is engaged in designing and manufacturing of

radio frequency and microwave super components and sub-systems finding
applications in defense, space, telecom, meteorology and civil communication
systems. Its products include radar, telemetry, ground-based and surveillance, RF
and optical mobile jammers, tower mounted amplifiers, tower mounted boosters
and tower mounted amplifiers among others.

These are very strong competitors of Bharti Infratel Ltd. They all financially strong
companies with good name attached to them. They have very strong client base. As
mentioned earlier this sector technology driven and need to upgrade them on the
regular basis which incur huge cost. So, Competitors have to maintain a price
balance and quality of the product

However, it is a well established company with high prestige in the market. No

doubt competition is there but they are also strong player of the market.
Impact of Covid-19 on the company

The covid-19 has actually positive impact on this sector the demand for internet
access has actually increased during this period. The demand for their product has
also increased. No doubt that company will make loss during this time period due
to the lockdown the services of the company were shutdown for almost two
months.

But if see the demand for internet and telecom services in future are going to
increase as more work from home facilities will be provided to the employees and
this will ultimately lead to demand for products of these companies.

Hence, covid-19 has impacted this sector but impacts are short term and in future
we can see the growth of this sector.

Conclusion

Bharti Infratel is a strong company with strong base. This company has great
potential to expand its operations in the future. In the past also company has
performed well and same can be expected in the future. The financials of the
company are very strong and an investor looking for long term investment can
consider this stock in their portfolio for good returns. The competition is tough in
this sector so there is a need for regular upgrade from one level to another. The
scope of expansion is huge and company should consider it. But if we see the
current scenario, in this economic slowdown first objective of the company should
be to establish itself and try to cover up all the loss incurred during this period.
If we consider overall performance of the company it is doing well and same is
expected in the future.