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Ratio Analysis of Vodafone Idea.

Presented by :
Hritvika Sharma (24049)
Kajal Shreshtha (24051)
Navjeet Verma (24065)
Prerna Thakur (24077)
Riya (24087)
 CONTENTS 2

• Introduction
• Liquidity Ratio
• Solvency Ratio
• Profitability Ratio
• Turnover Ratio
• Valuation Ratio
• Conclusion
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Introduction
 Vodafone Idea Limited is an Indian telecommunication
company with its headquarters based in Mumbai and
Gandhinagar.

 The company offers a wide range of telecom services,

including mobile, broadband, and enterprise solutions.

 The Government of India owns 23.8% of Vodafone Idea as

equity, Vodafone owns 23.2%, and Aditya Birla Group
owns 14.99%.

 The Company is listed on National Stock Exchange

(NSE) and Bombay Stock Exchange (BSE) in India.
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Quick data Recent performance of Vodafone Idea
Market capitalisation Rs. 593.15 Cr

Current price Rs. 8.52

52-week high/low Rs. 19.18/8.42

BSE Code 532822

NSE Code IDEA

Gross Sales Rs. 423211 Cr

Total Income Rs. 424675 Cr

Vodafone Idea Shares price in the year 2007 was ₹138.70. If you had invested ₹10,000 in Vodafone Idea
Shares in 2007, in 17 years, your investment would have reduced to ₹614 by the end of 2024. This represents
a negative return of -93.9% from 2007 to 2024, with a compound annual growth rate (CAGR) of -15.2%.
 Liquidity Ratio 4

CURRENT LIABILITIES MAR 24 MAR 23 MAR 22 MAR 21 MAR 20 CURRENT RATIO QUICK RATIO CASH RATIO

0.3984
Short Term Borrowings 4,989.20 12,530.4 15,123.1 73.00 154.20
0 0

Trade Payables 13,921.6 13,711.2 13,324.1 13,166.7 11,480.4

0.35
0.35
0 0 0 0 0

Other Current Liabilities 35,067.4 33,676.3 32,475.6 52,590.2 83,416.0

0.31
0.31
0 0 0 0 0

0.3
0.3
0.29
0.29
Short Term Provisions 33.30 11.40 19.10 42.40 46.30

0.23
0.23
TOTAL CURRENT 54,011. 59,929. 60,941. 65,872. 95,096.
LIABILITIES 50 30 90 30 90
CURRENT ASSETS MAR 24 MAR 23 MAR22 MAR 21 MAR20

Current Investments 0.20 0.00 0.00 0.00 454.80

Inventories 0.20 0.40 0.30 0.00 0.00

Trade Receivables 2,122.20 2,124.50 2,391.50 2,440.80 2,919.10

Cash And Cash Equivalents 453.90 771.60 3,378.20 2,013.80 2,533.80

0.0259

0.0149
Short Term Loans And 235.60 279.10 314.10 555.60 842.10

0.0099
0.0057
Advances

OtherCurrentAssets 13,816.9 14,992.7 15,273.4 13,905.7 15,070.4

0 0 0 0 0 Ja n - 2 0 Ja n - 2 1 Ja n - 2 2 Ja n - 2 3 Ja n - 2 4
 Solvency Ratio 6

Solvency ratio is the financial metric that measures a company’s ability

to meet its long-term debt obligations
Ratios 2020 2021 2022 2023 2024

Debt Equity 10.69 -4.17 -2.86 -2.56 -1.9

Ratio

Debt to Asset 0.83 1.09 1.22 1.20 1.38

Ratio

Proprietory 0.03 -0.18 -0.31 -0.35 -0.56

Ratio

Interest -2.98 -1.47 -0.34 -0.25 -0.18

Coverage
Ratio
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• Debt To Asset Ratio

= Total debt/Total Assets

Vodafone idea ltd had Debt to asset ratio in 2020 is 0.83. which means that the value of
debt are more than its assets. But year on year its Debt to Asset ratio has increasing and in
2024 it is 1.38, which means that company has more debt as compare to its assets.

• Proprietary Ratio
= Shareholders’ Fund /Total Assets
Vodafone idea Ltd. Negative proprietary ratio. It means that the company is more dependent
on debt and more liabilities than its assets. Which in not good for the financial stability of
the Company. If we compare the proprietary ratio of 2020 with 2024 then we can see that it
goes to negative from 0.03 to -0.56.
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= EBIT

Interest
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SUMMARY
In FY24, Vodafone Idea’s long term debt was 2,029 billion, which
is a 7.2% increase from FY23. and total bank debt was around
4200 Crore. Fixed assets has see a fall.
It’s current level of cash generation is expected to be enough to
meet its FY2025 obligations. However, liquidity is expected to
remain stretched going forward due to the expected increase in
repayment obligations.
 Profitability ratio
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RATIOS BASED ON SALES

PROFITABILITY MAR MAR MAR MAR MAR

RATIOS 2024 2023 2022 2021 2020

Gross Profit Ratio (%) 99.8 99.9 99.9 100 100

Net Profit Ratio (%) -73.96 -69.91 -73.87 -111.09 -165.55

Expense Ratio (%) 174.14 170.43 174.68 158.83 155.06

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RATIOS BASED ON INVESTMENT
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PROFITABILITY MAR MAR MAR MAR MAR

RATIOS 2024 2023 2022 2021 2020

Return on Total Asset

-13.02 -11.72 -10.09 -15.43 -20.92
Ratio (%)
Return on Capital
-4.03 -4.63 -5.33 -19.81 -30.19
Employed Ratio (%)
Return on Equity Ratio
N/A N/A N/A 0 -225.64
(%)
Earning Per Share
-6.41 -8.43 -9.82 -16.11 -26.97
Ratio
Dividend Pay-Out Ratio
N/A N/A N/A 0 0
(%)
Dividend Yield Ratio
0 0 0 0 0
(%)
Price Earning Ratio -2.15 -2.11 -2.14 -0.57 -0.11
 Turnover Ratio 1
2
30
Receivable turnover ra-
tio
Turnover Ratio March March March March March
24 23 22 21 20 25

Inventory 0.00 0.00 0.00 0.00 0.00 20

turnover ratio
15
Receivable 18.65 19.94 23.46 24.37 25.96
turnover ratio
10

Working capital -1.03 -0.91 -0.87 -0.80 -0.57

5
turnover ratio

0
Asset turnover 0.22 0.21 0.19 0.19 0.20 2020 2021 2022 2023 2024
ratio
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 Valuation ratio 1
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• Price to Earnings (P/E) Ratio: Price per Share/Earning per share.

It helps investors understand how much they are paying for each unit of a company's
earnings.
• Price to Sales (P/S) Ratio: Market Capitalization/Total sales or Revenue.
It shows how much investors are willing to pay for each dollar of the company's sales.
• Price to Book (P/B) Ratio: Market price per share/Book value per Share.
Market Price per Share is the current trading price of a company's stock.
Book Value per Share is the value of the company's assets minus its liabilities, divided by
the number of outstanding shares.
• Enterprise Value to EBITDA (EV/EBITDA): EV/EBITDA
Enterprise Value (EV) = Market Capitalization + Total Debt - Cash and Cash Equivalents.
EBITDA is a measure of a company’s operating performance, representing earnings
before interest, taxes, depreciation, and amortization.
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Valuatio 2024 2023 2022 2021 2020
n ratio VALUATION RATIO
35

Price to -2.07 -0.69 -0.98 -0.60 -0.11 30

Earnings
(P/E) Ratio 25

Price to 1.56 0.67 0.81 0.63 0.20 20

Sales (P/S)
Ratio
15

Price to -0.64 -0.38 -0.50 -0.70 1.49

Book (P/B) 10
Ratio
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Enterprise 29.04 26.95 25.37 13.65 12.75
Value to 0
2020 2021 2022 2023 2024
EBITDA
(EV/EBITD -5
A)
P/E P/S P/B EV/EBITDA
As of October 2024, Vodafone Idea's valuation ratios are primarily characterized by negative
figures, reflecting the company's ongoing financial struggles.
1. Price to Earnings (P/E) Ratio: Currently, the P/E ratio is not available because the
company is reporting negative earnings. Negative P/E Ratio: Occurs when a company has
negative earnings, indicating losses.
2. Price to Sales (P/S) Ratio: The P/S ratio is also not provided, indicating potential issues in
revenue generation relative to its market price. No Earnings Required: Unlike the P/E ratio,
the P/S ratio can be used even if a company is unprofitable.
3. Price to Book (P/B) Ratio: Vodafone Idea has a P/B ratio of approximately -0.49,
which suggests that its market capitalization is below its book value, indicating a distressed
situation compared to its assets. Low P/B Ratio: May indicate that the stock is undervalued
or that the company is facing financial difficulties.
4. Enterprise Value to EBITDA (EV/EBITDA): Similar to other ratios, this information is
also currently unavailable, likely due to the negative earnings situation. High EV/EBITDA:
Suggests that a company may be overvalued or has lower earnings relative to its enterprise
value.
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CONCLUSION 6

Vodafone Idea's stock is in a poor state, with a number of factors

contributing to its decline. Company's valuation is attractive based on
intrinsic value, but its financials are weak.
The company's stock price decline can be attributed to intense competition in
the telecommunication industry and the company's high debt burden.
Vi is struggling to compete against rivals like Reliance Jio and Bharti Airtel,
especially in rolling out 5G services. While both competitors have already
launched 5G nationwide, Vi has yet to implement its own 5G network, which
is critically dependent on securing new capital.