The document compares the cash flow statements of Bharti Airtel and Idea Cellular for the years ended March 31, 2017 and March 31, 2016. For both companies, there was a cash inflow from operating activities but an outflow from investing activities, indicating that the cash generated from operations was not enough to cover capital expenditures. Airtel and Idea both had a cash inflow from financing activities in 2017 through borrowing, but Idea had an outflow from financing in 2016. Despite losses in 2017, Airtel maintained the largest market share of wireless subscribers in India as of December 2017.

1. COMPARISON OF CASH FLOW STATEMENT OF TWO TELECOM
COMPANIES, HERE IT IS AIRTEL AND IDEA
VS
PRESENTED BY:
PRIYOM MAJUMDER
ITM UNIVERSITY, GWALIOR, MP

2. Bharti Airtel came into existence in the year 1995 founded by Sunil Mittal. Bharti
Airtel Limited is an Indian Global Telecommunications service company based on
New Delhi, India. It operates in 16 countries across South Asia and Africa. Its total
revenue for the FY 2016-17 was around US $15 billion, Operating Income of US
$5.4 billion, Net Income US $650 million, Total Assets US $36 billion and Total
Equity of US $11 billion.
Current Share Price of Airtel has stood at ₹394.40 (19th April 3:30pm). A rise of
₹10.15 that day.

3. Particulars
For the year ended
March 31, 2017
For the year ended
March 31, 2016
a. Cash Flows from Operating Activities:
(Losses)/Profit before tax
Adjustments
Operating Cash Flow before change in W.C
Changes in Working Capital
Net Cash Generated from operation before tax
Income Tax Paid
Net Cash generated from Operating Activities
(85,095)
304,657
219,562
6,533
226,095
(14,439)
211,656
100,398
121,981
223,054
(675)
222,379
(21,797)
200,582
b. Cash Flows from Investing Activities
Adjustments
Net Cash used in Investing Activities
(242,833)
(242,833)
(222,833)
(222,833)
c. Cash Flow from Financing Activities
Adjustments
Net Cash generated from Financing Activities
34,557
34,557
18,885
18,885
Net increase/(decrease) in cash & cash equivalent 3,380 (3,366)
All amounts are in millions of INR
To view the full document click here.
Cash Flow Statement of FY 2016-17

4. 338
-336.6
-57.1
117.9
-26.9
-400
-200
0
200
400
Amountin₹Cr.
NET CASH FLOW
(2017-2013)
211 200 179 160 138
-242 -222
-128 -170
-107
34 18
-51 -11 -31
-400
-200
0
200
400
Amountin₹Billion
ALL THE ACTIVITIES INFLOWS (OUTFLOWS)
Operating Investing Financing
 Airtel had an inflow from financing activity but outflow of
cash from investing activities in the year 2017.
 This means the surplus from the operating activity was not
enough to cover the capital expenditures (investing
activity) so they borrowed loans to cover the loss and
thus came up with a net positive cash flow.
 In 2016, Airtel had the same condition, it had a positive
cash inflow from operating and financing activity but the
net cash flow is negative.
 The company failed to generate a positive cash flow from
operating activity and as a result they failed to get a
positive net cash flow.

5. Idea Cellular (commonly referred to as simply Idea, and stylized as of !dea) started
its journey in 1995 as Birla Communications Limited with GSM Licenses in Gujarat
and Maharashtra circles. Its headquarter is at Mumbai, Maharashtra. Its parental
company is Aditya Birla Group. Its total revenue for the year 2016 was US $5.4
billion and operating income being US $1.4 billion. Its current share price is ₹71.15
(on 19th April 2018, 3:56 pm), a decrease in ₹0.35.

6. Particulars
For the year ended
March 31, 2017
For the year ended
March 31, 2016
a. Cash Flows from Operating Activities:
(Losses)/Profit before tax
Adjustments
Operating Cash Flow before change in W.C
Changes in Working Capital
Net Cash Generated from operation before tax
Income Tax Paid
Net Cash generated from Operating Activities
(14,190.03)
117,602.41
103,412.38
4,198.31
107,610.69
(5,883.12)
101,727.57
26,166.56
94,369.27
120,535.83
(3,739.11)
116,796.72
(8,299.10)
108,497.62
b. Cash Flows from Investing Activities
Adjustments
Net Cash used in Investing Activities
(156,595.48)
(156,595.48)
(126,374.10)
(126,374.10)
c. Cash Flow from Financing Activities
Adjustments
Net Cash generated from Financing Activities
48,740.37
48,740.37
(93,328.03)
(93,328.03)
Net increase/(decrease) in cash & cash equivalent (6,127.54) (111,204.51)
All amounts are in millions of INR
To view the full document click here.
Cash Flow Statement of FY 2016-17

7. -612.75
-11120.4
12613.31
-950.05
910.8
-15000
-10000
-5000
0
5000
10000
15000
Amountin₹Cr.
NET CASH FLOW (2017-2013)
-20
-10
0
10
20
Amountin₹million
ALL THE ACTIVITIES INFLOWS (OUTFLOWS)
Operating Investing Financing
 Idea had an inflow from financing activity but outflow of
cash from investing activities in the year 2017.
 This implies that the company was able to generate cash
to cover the investing activities but that was not enough
to cover the total loss.
 The net cash outflow shows that the company is in
financial trouble.
 In 2016, Idea had an outflow of cash from investing and
financing activity that implies that the surplus from
operating segment is used to pay for undertaken
investments or pay to owners and creditors.
 But since the net increase in cash and cash equivalents is
negative, then it is suggesting that the firms is in financial
troubles.

9. 0
5000
10000
15000
20000
25000
2017 2016 2015 2014 2013
Amountin₹million
Airtel Idea
On the basis of operating activity we find the following point important:
 Idea is facing a great competition from the leading telecom brands like Airtel and Reliance Jio.
 Lack of proper use of the resources available with respective to Airtel
 Operating Activity of the company is the tool that measures the net sales and performance of the
company
 Because of being depicting the companies core business therefore the operating activity is very important
for describing how good is it going.
 From the graph it is very clear that the
company Airtel was in far better condition
than Idea because they are increasing their
core business.
 Probable shortfall of idea may be because of
the lack of resources or the proper forecasting
of future.
 Airtel made a good effect on the mind of the
users that they have good services, their
expenses towards advertising has paid them
off.
 Idea had a shortfall of good advertisement
and thus their core business was lacking from
airtel.

10. -30000
-25000
-20000
-15000
-10000
-5000
0
Amountin₹crores
Airtel Idea
On the basis of investing activity we find the following point important:
 Investing activity of any company shows how much a company has invested in acquiring assets either
tangible or non-tangible and how much they sold them.
 This is the most important activity for a company because without investing they would not be able to
make their money.
 Investing activities of cash flow statement contains information about the acquiring assets of both tangible
and intangible assets.
 From the graph it is very clear that Idea
invested less in acquiring assets than Airtel.
 Idea had sold their assets in more than Airtel
ands thus they have lesser cash outflow from
investing.
 The greater investment had made Airtel easier
to earn profits and grab their customers
 Idea on the other hand lacked in acquiring
customers and investors in investing in their
firm.

11. -15000
-10000
-5000
0
5000
10000
Amountin₹crores
Airtel Idea
On the basis of financing activity we find the following point important for interpretation:
 Financing activity refers to the raising of loans and capital from the market.
 Financing activity is important because it shows the amount of capital raised from the market and the
amount they repaid to the lender/investors.
 The amount is generally positive because the company gets an inflow of cash from this activity.
 Negative balance in this activity refers to the inappropriate position of the company.
 From the graph it is very clear that in the
FY’17 and FY’16 Airtel raised loans and
capital from the market.
 Idea on the other hand repaid their debts in
the FY’16 and raised loan and capital in the
FY’17.
 Repayment of loan had made Idea work with
less liability which is a better situation when
the competition is high.
 On the other hand Airtel’s raising loan had
made them more risky. They increased their
liability and this made them go to a risky
zone.

12. -10000
-5000
0
5000
10000
15000
20000
Amountin₹crores
Airtel Idea
On the basis of profits we find the following point important:
 Airtel was in good position until 2016 than Idea.
 Idea and Airtel both were in losses for the Financial year 2017 but idea won the race
 Airtel made a huge loss in the Financial Year 2017 because of fighting for keeping themselves alive in the
race.
 Idea didn’t came forward on technology expansion much and managed to bear a lesser loss than Airtel.
 From the graph it is very clear that idea is in a
good position on the basis of bearing losses
than Airtel.
 Airtel did good in Operating Activities but
they did had a huge investment in acquiring
assets and that made them incur a loss.
 Idea made a loss but their lesser investment in
acquiring assets saved them.
 Idea accurately forecasted for the future and
thus planned well for bearing a less loss than
other telecom companies for the financial
year 2017

13. 35.85
36.69
41.91
33.17
84.93
107.91
160.09
196.49
212.52
290.11
0 50 100 150 200 250 300 350
MTNL
Tata
Telenor (Telewings)
Reliance
Aircel
BSNL
Reliance Jio
Idea
Vodafone
Airtel
Amount of subscribers in millions
MARKET SHARE DECEMBER’17
 In spite of having a huge loss in the
Financial year 2016-17, Airtel managed to
stay in the 1st Position in the market share
in India with a market share of more than
290 million.
 Idea managed to be in the third place with
a market share of over 190 million after
Vodafone with a market share of more
than 210 million.
 The two leading companies idea and
Vodafone got merged because of capturing
the market share.
 Reliance Jio with a market share of 160
million managed to be in the 4th place.