Sectorial Analysis Reliance Communications vs Nestle India

Reliance Agro Introduction

Reliance Com are a leading integrated and converged telecommunications operator in India, and,
through our international Subsidiaries, are one of the leading global data communications service
providers. In India, Reliance Com own and operate a nationwide telecommunications network
through which Reliance Com offer a full range of telecommunications services to retail and
enterprise customers, including mobile and fixed-line services, national and international longdistance connectivity, broadband services and enterprise solutions. Reliance Com also provide
tower infrastructure to other telecommunications operators. Internationally, Reliance Com provide
retail and wholesale voice connectivity, and through our Subsidiary, GCX, Reliance Com provide
a wide range of products and services to allow enterprise customers to create, manage and
connect
global
data
networks.
Reliance Com have established a pan-India, integrated (wireless and wireline) and convergent
(voice, data and video) digital network capable of supporting services spanning the entire
telecommunications value chain, and covering over 21,000 cities and towns and over 400,000
villages. Reliance Com provide 3G services across 13 Circles covering 334 cities, including the
metropolitan Circles of Mumbai, Delhi and Kolkata. Additionally, Reliance Com provide 3G
services in the five Circles of Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Uttar Pradesh
(East) through ICR arrangements, thus increasing our 3G coverage to 18 Circles.
In the spectrum auction of March 2015, Reliance Com further strengthened our spectrum
portfolio by acquiring spectrum in the 800/850 MHz band increasing the spectrum holding to
5MHz or more, from 12 circles earlier to 21 circles. This places us in an unparalleled position in
the Indian telecommunication space, as this band is recognized as one of the most poParlerful
spectrum bands in the sub-1 GHz spectrum category. Globally many operators have launched
LTE services on this band. Reliance Com believe this gives us the unique capability to launch
LTE
services
in
an
efficient
manner.
Reliance Com provide wireless broadband services on our own network in 1,624 cities and towns
and offer Internet connectivity in over 19,000 towns across India. Reliance Com also offer public
calling office services over our wireless network through independent retail operators of such
facilities. Additionally, Reliance Com provide connectivity for devices such as point of sale
terminals,
lottery
terminals,
and
ATM
terminals.
Our more than 43,000 telecommunications towes are used for both CDMA and GSM mobile
networks and service multiple mobile service providers, including ourselves, are located in all 22
Circles in India, and are supported by an OFC network of over 190,000 Km. Reliance Com hold
UASL and 3G spectrum licences as Reliance Com as licenses for the provision of NLD and ILD
services. Our ten data centres in four cities have a total capacity of approximately 1.1 million
square feet (including one data centre under construction). These networks are monitored on a
round-the-clock basis for quality, repairs, maintenance and troubleshooting through two network
operating centres, including our disaster recovery network operating centre in Hyderabad.

In India, Reliance Com also offer nationwide DTH services through our wholly-owned subsidiary,
Reliance Big TV, in 8,350 cities and towns. Using MPEG 4 technology, Reliance Com offer 277
channels in HD like quality. Reliance Com also offer Standard Definition, High Definition and High
Definition-DVR
set-top
boxes.
As at September 30, 2015, Reliance Com had a customer base of over 118 million customers,
including 110.4 million wireless customers (including 37.2 million data subscribers, of which 19.1
million Reliance Comre 3G subscribers), 1.2 million wireline customers, over 2.6 million overseas
retail customers and 4.9 million DTH customers. Our enterprise clientele includes over 39,000
Indian and multinational corporations, including SMEs and over 290 global, regional and
domestic carriers. Our enterprise customers include over 900 prominent enterprises in India.
Our Global Operations comprise the provision of voice, data and Internet network and services,
and the lease of submarine cable infrastructure and metropolitan city networks. Reliance Com
have approximately 650 enterprise customers throughout developed markets such as the United
States, the United Kingdom, the Netherlands and Singapore. Reliance Com own and operate a
widespread submarine fibre optic cable network spanning 68,698 Km and connecting North
America, Europe, the Middle East and Asia through 46 landing points in 27 countries. The total
installed capacity of our five subsea cable systems is over 21 Tbps. Reliance Com also have
owned and leased metropolitan networks in 27 cities across 13 countries. Reliance Com are one
of the leading managed Ethernet service providers in the United States and have an established
position in the global enterprise data market.
Top
Key Company Highlights
Presence in an Industry with high growth potential
Large customer base with strong market position and leadership in data subscribers
Ample wireless spectrum portfolio with long validity period
Comprehensive domestic and international network
Extensive distribution network with strong brand recognition
Experienced management team
Consistent financial performance

Share Information
Issued Shares
2,489.0 Mn shares as at Sep 30, 2015
Stock Exchange Listing
Bombay Stock Exchange Limited (BSE)

National Stock Exchange of India Limited (NSE)

Luxembourg Stock Exchange
Stock Exchange Scrip Code
NSE - RCOM
BSE - 532712
Security codes of GDRs
Master Rule 144A GDRs
CUSIP
75945T106
ISIN
US75945T1060
Common Code
025317530

Master Regulation S GDRs

75945T205
US75945T2050
025317645

Top
Recent Awards & Accolades
FY 2016

AC Nielsen's Corporate Image Monitor (CIM) - RCom in Top 10

Economic Times India's Most Exciting Brands - Reliance in Top 14

FY 2015

Telecom Leadership Award 2015 - CIO of the Year award from CyberMedia
(Voice&Data) Group
Managed Video Conferencing Service Provider of the Year at 2014 Frost & Sullivan
India ICT Awards
IT Edge Award 2014 conferred by UBM
Woman Leader in IT by Interop
CIO 100 by IDG Media
Economic Times HR Excellence Award, 2014

FY 2014

Nasscom DSCI Excellence Award (IT Security and Privacy)

IT EDGE Award (IT processes setup using TM forum standards, benchmarked in
International arena)
IT Transformers Award by EMC (Enterprise Storage Management)
Amdocs Innovation Award
The 'INFOSEC Maestros' Award (deploying the anti-DDOS (Distributed Denial of
Services) Solution)
The 'Top 100 CISO' Award (Automation of User Access Management)

Latest Financial Results

Comparison of Quarters

Financial results for the quarter ended September 30, 2015 as per Indian GAAP. In the tables
below, Qtr ended 30/06/15 refers to the three month period ended June 30, 2015, Qtr ended
30/09/14 refers to the three month period ended September 30, 2014 and Qtr ended 30/09/15
refers to the three month period ended September 30, 2015. Exchange rate for conversion of
Indian Rupees to United States Dollars is Rs 63.65 = US$ 1.00 for the quarter ended June 30,
2015, Rs 61.75 = US$ 1.00 for the quarter ended September 30, 2014 and Rs 65.59 = US$ 1.00
for the quarter ended September 30, 2015, being the revaluation rate as announced by FEDAI.

Consolidated Balance Sheet

NESTL's relationship with India

dates back to 1912, when it began
trading as The NESTL AngloSwiss Condensed Milk Company
(Export)

Limited,

importing

and

selling finished products in the Indian market.

After India's independence in 1947, the economic policies of the Indian Government emphasised
the need for local production. NESTL responded to India's aspirations by forming a company in
India and set up its first factory in 1961 at Moga, Punjab, where the Government wanted NESTL
to develop the milk economy. Progress in Moga required the introduction of NESTL's
Agricultural Services to educate, advise and help the farmer in a variety of aspects. From
increasing the milk yield of their cows through improved dairy farming methods, to irrigation,
scientific crop management practices and helping with the procurement of bank loans.
NESTL set up milk collection centres that would not only ensure prompt collection and pay fair
prices, but also instil amongst the community, a confidence in the dairy business. Progress
involved the creation of prosperity on an on-going and sustainable basis that has resulted in not
just the transformation of Moga into a prosperous and vibrant milk district today, but a thriving
hub of industrial activity, as well.
NESTL has been a partner in India's growth for over nine decades now and has built a very
special relationship of trust and commitment with the people of India. The Company's activities in
India have facilitated direct and indirect employment and provides livelihood to about one million
people including farmers, suppliers of packaging materials, services and other goods.
The Company continuously focuses its efforts to better understand the changing lifestyles of India
and anticipate consumer needs in order to provide Taste, Nutrition, Health and Wellness through
its product offerings. The culture of innovation and renovation within the Company and access to
the NESTL Group's proprietary technology/Brands expertise and the extensive centralized
Research and Development facilities gives it a distinct advantage in these efforts. It helps the

Company to create value that can be sustained over the long term by offering consumers a wide
variety of high quality, safe food products at affordable prices.
NESTL India manufactures products of truly international quality under internationally famous
brand names such as NESCAF, MAGGI, MILKYBAR, KIT KAT, BAR-ONE, MILKMAID and
NESTEA and in recent years the Company has also introduced products of daily consumption
and use such as NESTL Milk, NESTL SLIM Milk, NESTL Dahi and NESTL Jeera Raita.
NESTL India is a responsible organisation and facilitates initiatives that help to improve the
quality of life in the communities where it operates.

Presence Across India

NESTLs Presence In India

After more than a century-old association with the country, today, NESTL India has presence
across

India

with

manufacturing

facilities

and

branch

offices.

NESTL India set up its first manufacturing facility at Moga (Punjab) in 1961 followed by its
manufacturing facilities at Choladi (Tamil Nadu), in 1967; Nanjangud (Karnataka), in 1989;
Samalkha (Haryana), in 1993; Ponda and Bicholim (Goa), in 1995 and 1997, respectively; and
Pantnagar (Uttarakhand), in 2006. In 2012, Nestle India set up its 8th manufacturing facility at
Tahliwal

(Himachal

Pradesh).

The 4 Branch Offices located at Delhi, Mumbai, Chennai and Kolkata help facilitate the sales and
marketing activities. The NESTL Indias Head Office is located in Gurgaon, Haryana.

* This pictorial representation does not purport to be the political map of India.
Research and Development
Research

and

Development

Centre

in

India

Research and Development (R&D) in India is part of NESTL S.A.s global R&D network and
supports all markets worldwide with new product development and manufacturing excellence for
Noodles. It is also a Centre of expertise for local Indian cuisine within the NESTL R&D network
and offers assistance to Culinary, Confectionery, Nutrition and Dairy products in the South Asia
Region
(SAR).
Better nutrition in the region is a perpetual challenge. Its meaning changes with the stage of
development, the degree of social awareness, and scientific advancement. The new NESTL
R&D facility in India will help develop great tasting food solutions that are relevant for consumers
in the South Asia Region, creating products that take the promise of taste and health to a broader
economic and social section than ever before. It will also strengthen NESTLs position as the
leader
in
Nutrition,
Health
and
Wellness
in
the
emerging
markets.
NESTL India has always had Research and Development support from the NESTL R&D
network across the world. Now, with the new R&D Centre in Manesar, NESTL South Asia
Region will benefit from a greater regional consumer focus. Having an R&D Centre in India also
brings Research and Development closer to NESTL India businesses, and reflects the NESTL
spirit of R&D-Business partnership towards developing winning concepts, suited to the local
consumer. It will in turn help NESTL R&D to bring out strong local concepts that are in
accordance with the NESTL Group ambition to provide affordable Nutrition, Health and
Wellness.
Ultimately, these concepts will not just be relevant for emerging markets like India, but could be
transferred to NESTL worldwide.
Key Figures
Rupees in Millions
Revenue

2012

2013
2014

D omestic Sales

81,561.9

87,537.4
94,853.2

Export Sales

4,256.9

6,261.3
6,441.8

Less: Excise duty

2,796.2

3,179.7
3,232.3

Net Sales

83,022.6

90,619.0
98,062.7

Operating Income

322.7

391.5
485.7

Total revenue from

operations

83,345.3

91,010.5
98,548.4

Total Expenses

67,944.9

74,068.7
80,622.9

Profit From Operations

15,400.4

16,941.8
17,925.5

Other income

310.3

830.9
873.2

Finance costs

266.0

365.1
142.3

Employee benefit expense due to passage

of time

558.1
648.3

Net provision for contingencies (others) -81.5

207.4
249.5

Profit Before Exceptional Items And

15,526.2
Taxation
Corporate social responsibility expense

16,642.1
17,758.6
0.0
85.1

Exceptional items

138.1
70.0

Profit before taxation

15,526.2

16,780.2
17,743.5

Tax expense

4,846.9

5,608.9
5,896.6

Profit after taxation

10,679.3

11,171.3
11,846.9

Earnings per Share (Rs.)

110.76

115.87
122.87

Dividends per Share (Rs.)

48.50

48.50
63.00

* The same was part of Total Expenses for the year 2012