The company’s scrip fell to a low of Rs 749.05 as against the previous close of Rs 764.95 on the BSE.
“The Negative Outlook does not reflect our view of Bharti’s underlying credit profile – which has been improving on strong growth in Indian and African wireless operations-but rather the heightened probability that India’s (BBB-/Negative) Country Ceiling of ‘BBB-‘ could be lowered to ‘BB+’. Such an action would constrain Bharti’s IDR and senior issue ratings to ‘BB+’,” Fitch said in a release on Thursday.
Fitch estimates Bharti’s funds from operations (FFO) net leverage at 1.8-2.0 times in the current financial year. This is much below the net leverage threshold of 2.5 times, which, if crossed would prompt the rating agency to take ‘negative rating action’.
The agency expects Airtel’s revenue for the current financial year to rise by 10-12 per cent and the earnings before interest taxes depreciation and amortization (EBITDA) to grow 20-22 per cent on account of improvement in the domestic wireless market as well as robust growth in African markets.
In the first six months of the current financial year, Bharti Airtel’s consolidated revenue and EBITDA climbed 14 per cent and 32 per cent year-on-year, respectively, with the company adding 30 million subscriber additions.
On Monday, shares of Airtel had jumped 5 per cent after the company raised tariff rates for pre-paid plans. The scrip went on to add 3 per cent on Wednesday after Moody’s affirmed the company’s Ba1 corporate rating.
