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| Bharti to rely less on telecom | |
| BS Reporters / New Delhi November 4, 2008, 0:40 IST | |
Eyes $10-bn revenue in two years
The Bharti Group is aiming to reduce its dependence on the telecom sector to 50 per cent for the group’s revenues by 2013. At the moment, telecom operations provide over 80 per cent of its revenues with new businesses which include retail, financial services and agriculture just about taking off the ground.
Unveiling a new brand for the group, the third time that the group has announced mega brand changes, Sunil Bharti Mittal, chairman and group CEO, Bharti Enterprises, said, “We are breaking free from our telecom legacy. In the next five years, we hope to get more than 50 per cent of our revenues from businesses other than telecom, which constitutes more than 80 per cent right now.”
The company is looking at touching the $10 billion revenue mark (around Rs 48,700 crore) by 2010. “In future, our telecom business will be very large, the toplines of our retail business will also be very large along with financial services,” he said.
The company is betting big on its retail business. Rajan Bharti Mittal, vice-chairman and managing director, Bharti Enterprises, said, “There is no slowdown in our retail plans as the fastest Rs 1,000-crore sales will come from retail. In fact, we expect our fastest billion dollar sales to come from this sector. Each of our stores has had faster per square feet sales than others.”
The company will roll out its large format stores including the cash and carry format stores by the first quarter of the next financial year.
Bharti Enterprises is also bullish on its insurance business through Bharti AXA. Explaining that the business remained unaffected by the current turmoil in the financial sector, Akhil Gupta, deputy group CEO and managing director, Bharti Enterprises, said, “We’re in the life insurance and general insurance business, which are essential and not affected by the economic situation. Ours is an underinsured country by any standard, so there is a lot of potential.”
“We expect to earn Rs 1,000 crore in premium by the next year,” added Gupta. By becoming the first company in the telecom sector to achieve free cash flows in the September quarter, the company is scouting aggressively for acquisitions abroad. “We are ready for acquisitions. Looking at the financials and balance sheet, our aspirations are there. We believe that our business model will succeed overseas,” said Sunil Mittal.
“It is true that the valuations of companies abroad are low right now, therefore we are ready. But the sellers are also weary of selling right now and holding back till they can get better valuations,” explained Gupta.
Mittal also cautioned that with volume growth, telecom tariffs have been falling but this might go on for only the next two to three years. After that the government support in terms of lower levies will be key to growth. He also said that the company was ready to get into the 3G space and was not in favour of any delay in the process of auctioning. He also pushed for further liberalisation in foreign direct investment in most areas, which he said would compensate for the flight of foreign institutional investment recently.
Brand makeover
Bharti’s change in brand identity will capture its vision to build the country’s finest business conglomerate by 2020. Sunil Mittal said, “Having diversified into new businesses in agriculture, financial services and retail with world-class partners, we have laid the foundation for building a conglomerate of future which will achieve $10 billion in revenues by 2010.”
“Bharti’s brand essence of ‘Big transformations. Brave actions’ will define all our actions and drive forward this vision. Our new brand identity and brand logo reflect this philosophy,” added Mittal.
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