GICS Industry: Wireless Telecommunication Serverl Sub Industry: Wireless Telecommunication Serverl Website: www.gtlinfra.

com

GTL Infrastructure Ltd

Key Stock Indicators
NSE Ticker: Bloomberg Ticker: Face value / Share: Div. Yield (%): GTLINFRA GTLI:IN 10.0 0.0 CMP (as on 25 Mar 2011Rs/share): 52-week range up to 25 Mar 2011 (Rs) (H/L): Market Cap as on 25 Mar 2011 (Rs mn): Enterprise Value as on 25 Mar 2011 (Rs mn): Div. Yield (%): 0.0 37.0 49.4/33.1 35,422 75,527 Shares outstanding (mn): Free Float (%): Average daily volumes (12 months): Beta (2 year): 957.3 41.7 1,469,887 1.1

GTL Infrastructure Limited (GTL Infra) is a Global Group enterprise and was incorporated in 2004. GTL Infra is Indias leading independent shared telecom tower provider. The Company owns 32,463 towers in 23 telecom circles across India as on December 2010. The employee strength of the company was 188 at the end of March 2010.

Key Financial Indicators

Revenue ( Rs mn) EBITDA margins (%) PAT (Rs mn) PAT margins(%) Gearing (x) EPS (Rs/share) PE (x) P/BV (x) RoCE (% ) RoE (%) EV/EBITDA (x) n.m.: Not meaningful Mar-08 1,246.0 52.1 -882.5 -70.8 2.7 -1.2 n.m 3.7 0.5 n.m 69.7 Mar-09 3,040.2 37.6 5.9 0.2 2.8 n.m 1.9 0.6 0.1 40.1 Mar-10 5,0 41.3 37.5 - 25.8 -0.5 2.5 n.m 2.0 0.5 n.m 40.0

KEY HIGHLIGHTS
Completed purchase of 17,500 Aircel Towers and 21,000 active tenancies In July 2010, GTL Infra has completed purchase of the telecom tower assets of Aircel at an enterprise value of Rs. 80.2 billion (bn). The Company has purchased Aircels tower business of 17,500 existing towers with 21,000 tenancies. Aircel has also committed additional 20,000 tenancies over a period of 3 years. GTL Infra has acquired these assets through its subsidiary, Chennai Network Infrastructure Ltd. (CNIL). The Company will fund this transaction through a mixture of debt and equity. The deal has resulted into a portfolio of more than 30,000 towers across 23 telecom circles in India. The company expects to have a portfolio of more than 50,000 towers across India by 2013. Integration of Aircel Tower business will provide GTL Infra an opportunity to offer a comprehensive tower network portfolio to new 2G & 3G players. The deal will also generate additional revenues for the company. Unsuccessful deal with Reliance Infratel Limited (RIL) In June 2010, GTL infra had agreed to merge the tower assets of RIL with them. The merged entity was supposed to have over 80,000 towers and 1,25,000 tenancies from over 10 telecom operators, some of which were Idea, Bharti Airtel, Vodafone etc. In addition, the merged entity would have option of 75,000 tenancies from other players. The transaction however couldnot be completed and the reasons for the failure to execute the deal were not disclosed by the company due to confidentiality of mutual agreements between the 2 companies.

Shareholding (As on December 31, 2010)

Others 37%

FII 4%

KEY RISKS
Competition from operator owned tower companies, independent tower companies, government operators and telecom service providers. Independent tower companies do not possess anchor tenancy or commitment from the parent operator for future tower rollout Risk of losing the high valued customers Risk of selecting site location, constructing & acquiring sites Absence or delay in receipt of the requisite regulatory approvals
(index) 140 120 100 80 ('000) 40000 35000 30000 25000 20000 15000 10000 5000 0 Nov-10 Apr-10 Dec-10 Aug-10 Sep-10 Oct-10 May-10 Feb-11 Jun-10 Jul-10 Jan-11
Promoter 59%

Indexed price chart

Stock Performances vis--vis market

Returns (%) YTD GTLINFRA NIFTY
Note: 1) YTD returns are since Apr 01, 2010 to Mar 25, 2011. 2) 1-m, 3-m and 12-m returns are up to Mar 25, 2011

60

1-m 1 5

3-m -13 -8

12-m -8 5

40 20 0 Mar-10

-13 4

Volumes (RHS)

GTLINFRA

NIFTY

CRISIL COMPANY REPORT | 1

GTL Infrastructure Ltd

BACKGROUND
GTL Infrastructure Limited (GTL Infra) is part of the Global Group enterprise and was incorporated in 2004. The Company is in the business of providing network and passive infrastructure through its telecom towers erected all across India. The company builds, owns, operates and maintains passive network infrastructure (towers) in order to meet the infrastructure needs of cellular telecom operators. The company operates under one business segment viz. Telecom Towers. The company has a portfolio of over 30,000 towers located across India. GTLs towers are distributed across High Average Revenue Per User (ARPU) generating Metros and Class A Circles and high growth regions of Class B & C Circles which benefits the telecom operators to rollout 2G, 3G or BWA on a pan-India basis in a short time. The company has a presence across 23 telecom circles in India. GTL Infra has a portfolio of towers serving all the major cellular operators and is associated with prestigious projects being promoted by Department of Telecommunication and Cellular Operators Association of India such as USO (Universal Services Obligation Fund) for rural telecom infrastructure and MOST (Mobile Operator Shared Tower).

COMPETITIVE POSITION
Peer Comparison

Revenue (Rs mn) EBITDA ma rgins (%) PAT (Rs mn) PAT ma rgi ns (%) Gea ring (x) EPS (Rs /s ha re) PE (x) P/BV (x) RoCE (%) RoE (%) EV/EBITDA (x)
n.m: Not meaningful

GTL Infrastructure Ltd Mar-10 5,041.3 37.5 -25.8 -0.5 2.5 n.m 2.0 0.5 n.m 40.0

Kavveri Telecom Products Ltd Mar-10 2,414.5 23.5 257.2 10.7 2.8 25.6 4.3 1.8 30.6 63.9 4.8

Nu Tek India Ltd Mar-10 1,943.6 15.8 185.6 9.6 0.2 5.4 3.7 0.4 14.8 10.9 3.0

Gemini Communication Ltd Mar-10 3,502.2 27.3 326.3 9.3 1.8 3.3 6.1 1.5 18.3 27.8 4.5

FINANCIAL PROFILE
Significant increase in top line; flat operating margins and net loss for FY10

Key Financial Indicators Units Revenue Rs mil li on Rs mil li on Per cent Per cent Per cent Ti mes Per cent Per cent EBITDA ma rgins Per cent PAT PAT ma rgi ns EBITDA growth PAT growth Gea ring RoCE RoE

Mar-08
1,246.0 52.1 -882.5 -70.8 85.8 44.4 n.m 2.7 0.5 n.m

Mar-09
3,040.2 37.6 5.9 0.2 144.0 76.4 n.m 2.8 0.6 0.1

Mar-10
5,041.3 37.5 -25.8 -0.5 65.8 65.1 n.m 2.5 0.5 n.m

Top line stood at Rs 5 bn and increased by 65.8% in FY10, compared with Rs 3.0 bn in FY09. This was mainly due to increase in number of telecom towers (including those under implementation) from 9,411 in FY09 to 12,456 in FY10 .Tenancy on Ready for Installation of Equipment (RFIE) towers moved up from 0.96 in FY09 to 1.17 in FY10. Number of tenants also increased from 7,198 in FY09 to 13,221 in FY10. Operating margins remained flat as compared to FY09 and stood at 37.5% in FY10 due to increase in power & fuel costs by ~3% which was offset by decrease in employee costs by ~2% and other expenses(rent, taxes, director fees, allowances etc) by ~1%. The net loss of the company stood at Rs 25.8 million (mn) in FY10, against a net profit of Rs 5.9 mn in FY09. The company incurred a net loss due to increase in depreciation and decrease in non operating income (dividend from investments) by ~40%. The company reported net profit in FY09 due to adjustment of deferred tax assets in against the tax liability.

Revenue growth Per cent

INDUSTRY PROFILE
Telecom equipment The telecom equipment market consists of equipment required to install wireline access, transmission and wireless networks, equipment at the customer`s premises, and enterprise networking-related equipment. We expect wireless services to drive growth in this sector due to robust subscriber addition. However, wireless infrastructure is an area where Indian players do not have a strong presence, and hence, are losing market share to international players. Domestic companies have greater capabilities on the wireline front (switches and transmission systems). Yet, despite BSNL and MTNL having been mandated to purchase 30 per cent of the telecom equipment manufactured locally, Indian companies will continue to face severe competition from foreign players, which have already announced plans to set up equipment manufacturing facilities in India. Telecom Services Wireless The wireless segment has witnessed rapid growth in 2009-10, adding about 192 million subscribers. As of 31st March 2010, the total wireless subscriber base stood at 584 million as compared to 391 million subscribers at the end of March 2009, exhibiting the growth of 49 per cent y-o-y. Deeper penetration into existing areas and expansion into rural India has led to wider availability, while declining tariffs has increased affordability, resulting in proliferation of the service. However, the industry is characterised by severe competition which is expected to intensify further with service expansion of new licensees, implementation of mobile number portability (MNP) and launch of 3G services. Given the shift in the competitive landscape in the mobile services sector, driven by intense pricing pressure, profitability of existing players is expected to remain under pressure. CRISIL COMPANY REPORT | 2

GTL Infrastructure Ltd

ANNUAL RESULTS

Income Statement (Rs million ) Net Sales Operating Income EBITDA EBITDA Margin Depreciation Interest Other Income PBT PAT PAT Margin No. of shares (Mn No.) Earnings per share (EPS) Cash flow (Rs million ) Pre-tax profit Total tax paid Depreciation Change in working capital Cash flow from operating activities Capital Expenditure Investments and others

Mar-08 1,245.8 1,246.0 648.5 52.1 824.0 593.4 274.9 -487.2 -882.5 -70.8 734.3 -1.2

Mar-09 2,208.4 3,040.2 1,144.1 37.6 1,411.5 997.1 534.1 -730.3 5.9 0.2 816.2 0.0

Mar-10 3,479.5 5,041.3 1,888.7 37.5 1,983.2 284.3 320.5 -25.8 -25.8 -0.5 957.3 0.0

Balance sheet (Rs million ) Equity share capital Reserves and surplus Tangible net worth Deferred tax liablity:|asset| Long-term debt Short-term-debt Total debt Current liabilities Total provisions Total liabilities Gross block Net fixed assets Investments Current assets Receivables Inventories Cash Total assets Ratio

Mar-08 7,342.6 1,983.5 9,326.1 742.1 24,352.8 404.0 24,756.9 2,282.5 3.5 37,111.1 13,340.8 19,935.2 663.4 16,512.5 422.1 0.0 13,756.4 37,111.1

Mar-09 8,161.6 4,463.2 12,624.9 0.0 35,013.3 463.2 35,476.5 3,811.7 280.8 52,193.9 24,277.1 32,030.9 0.3 20,162.6 550.4 24.5 13,647.2 52,193.8

Mar-10 9,573.5 8,132.2 17,705.7 0.0 38,548.6 6,159.0 44,707.6 3,930.7 233.7 66,577.7 35,143.0 40,279.9 18,584.7 7,713.0 337.1 39.4 4,602.5 66,577.6

Mar-08 -494.0 -4.7 824.0 -1,062.6 -737.3 -11,063.5 641.1

Mar-09 -730.5 -5.9 1,411.5 -1,952.7 -1,277.6 -13,515.6 663.0

Mar-10 -58.4 0.0 1,983.2 3,476.7 5,401.5 -10,231.4 -18,584.4

Revenue growth (%) EBITDA growth(%) PAT growth(%) EBITDA margins(%) Tax rate (%) PAT margins (%) Dividend payout (%) Dividend per share (Rs) BV (Rs) Return on Equity (%) Return on capital employed (%) Gearing (x) Interest coverage (x) Debt/EBITDA (x) Asset turnover (x) Current ratio (x) Gross current assets (days)

Mar-08 85.8 44.4 n.m 52.1 -1.0 -70.8 0.0 0.0 12.7 n.m 0.5 2.7 1.1 38.2 0.1 6.4 4809

Mar-09 144.0 76.4 n.m 37.6 -0.8 0.2 0.0 0.0 15.5 0.1 0.6 2.8 1.1 31.0 0.2 3.7 1996

Mar-10 65.8 65.1 n.m 37.5 0.0 -0.5 0.0 0.0 18.5 n.m 0.5 2.5 6.6 23.7 0.2 1.0 520

Cash flow from investing activities Equity raised/(repaid) Debt raised/(repaid) Dividend (incl. tax) Others (incl extraordinaries)

-10,422.4 5,794.5 17,579.8 0.0 1,237.7

-12,852.6 3,502.0 10,719.6 0.0 -200.5

-28,815.8 5,598.6 9,231.1 0.0 -460.1

Cash flow from financing activities Change in cash position Opening cash Closing cash
n.m : Not meaningful;

24,612.0 13,452.3 304.2 13,756.4

14,021.1 -109.1 13,756.4 13,647.2

14,369.6 -9,044.7 13,647.2 4,602.5

QUARTERLY RESULTS
Profit and loss account (Rs million) No of Months Revenue EBITDA Interes t Depreci a tion PBT PAT Dec-10 3 1,254.1 597.7 689.3 528.4 (619.9) (619.9) 100.0 47.7 55.0 42.1 (49.4) (49.4) % of Rev Dec-09 % of Rev 3 1,227.7 819.2 273.1 315.6 230.5 230.5 100.0 66.7 22.2 25.7 18.8 18.8 Sep-10 3 1,232.4 726.1 370.6 517.2 (161.7) (161.7) 100.0 58.9 30.1 42.0 (13.1) (13.1) % of Rev Dec-10 9 3,923.9 2,320.3 1,762.7 1,532.5 (975.0) (975.0) 100.0 59.1 44.9 39.1 (24.8) (24.8) % of Rev Dec-09 9 3,455.5 2,342.0 1,014.1 1,289.2 38.7 38.7 100.0 67.8 29.3 37.3 1.1 1.1 % of Rev

CRISIL COMPANY REPORT | 3

GTL Infrastructure Ltd

FOCUS CHARTS & TABLES
Rs mn 1,600 1,400 1,200 1,000 800 600 400 200 0 Dec-08 Dec-09 Sep-08 Sep-09 Mar-08 Mar-09 Mar-10 Sep-10 Jun-08 Jun-09 Jun-10

Quarterly sales & y-o-y growth

Dec-08

Dec-09

Mar-08

Mar-09

Sales

Sales growth y-o-y (RHS)

Dec-10

Net Profit

Net profit growth y-o-y (RHS)

Dec-08

Dec-09

Mar-08

Mar-09

Dec-08

Dec-09

Mar-08

Mar-09

Mar-10

Dec-10

Sep-08

Sep-09

Sep-10

Jun-08

Jun-09

Jun-10

OPM

Mar-10

NPM

Shareholding Pattern (Per cent) Mar 2010 Jun 2010 Promoter 53.4 58.3 FII 4.5 1.9 DII 1.6 0.4 Others 40.5 39.4

Sep 2010 58.3 3.1 0.4 38.1

Dec 2010 58.3 4.3 0.3 37.1

Board of Directors Director Name Manoj Ga janan Ti rodkar (Mr.) Na garajan Ra mas amy Bal as ubra ma ni an (Mr.) Vi nod Bal mukand Agarwal a (Mr.)

Designation Non-Executi ve Chai rman Non-Executi ve Vi ce Chai rma n Non-Executi ve Di rector

Vi vek Vas ant Rao Kul karni (Mr.) Non-Executi ve Di rector Charudatta Kashi nath Nai k (Mr.) Non-Executi ve Di rector Vi shwa s Vas ant Pathak (Mr.) Anand Prabhaka r Patka r (Dr.) Prakas h Bhas kar Rao Ra njal kar (Mr.) Satya Pal Ta l wa r (Mr.) Vi jay Manohar Vi j (Mr.)
Additional Disclosure This report has been sponsored by NSE - Investor Protection Fund Trust (NSEIPFT). Disclaimer This report is based on data publicly available or from sources considered reliable. CRISIL Ltd. (CRISIL) does not represent that it is accurate or complete and hence, it should not be relied upon as such. The data / report is subject to change without any prior notice. Opinions expressed herein are our current opinions as on the date of this report. Nothing in this report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The subscriber / user assume the entire risk of any use made of this data / report. CRISIL especially states that, it has no financial liability whatsoever, to the subscribers / users of this report. This report is for the personal information only of the authorised recipient in India only. This report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person especially outside India or published or copied in whole or in part, for any purpose. CRISIL is not responsible for any errors and especially states that it has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this report. For information please contact 'Client Servicing' at +91-22-33423561, or via e-mail: [email protected].

Non-Executi ve Di rector Non-Executi ve Di rector Whol eti me Di rector Non-Executi ve Di rector Non-Executi ve Di rector

CRISIL COMPANY REPORT | 4

Dec-10

Sep-08

Sep-09

Sep-10

Jun-08

Jun-09

Jun-10

Rs/share 0.3 0.2 0.1 0 -0.1 -0.2 -0.3 -0.4 -0.5 -0.6 -0.7

EPS

Per cent 100 80 60 40 20 0 -20 -40 -60 -80

Movement in operating and net margins

Mar-10

Dec-10

Sep-08

Sep-09

Sep-10

Jun-08

Jun-09

Jun-10

Per cent 160 140 120 100 80 60 40 20 0 -20 -40

Rs mn 400 200 0 -200 -400 -600 -800

Quarterly PAT & y-o-y growth

Per cent 2,000 1,500 1,000 500 0 -500