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Bharti Airtel share falls for the second consecutive session post Moody's rating downgrade

On the Sensex, the Bharti Airtel share fell 2% to 301 level. The large cap stock lost 2.26% to 301.25 on Nifty. 22 of 28 brokerages rate the stock "buy" or 'outperform', four "hold" and two "underperform", according to analysts' recommendations tracked by Reuters.

twitter-logoBusinessToday.In | February 6, 2019 | Updated 16:06 IST
Bharti Airtel falls for the second consecutive session post Moody's rating downgrade announcement
Bharti Airtel share falls for the second consecutive session post Moody's rating downgrade

The Bharti Airtel share continued its losing streak for the second consecutive session today after Moody's Investors Service downgraded the credit rating of the telco. The Bharti Airtel share was the top Sensex and Nifty loser in trade today. On the Sensex, the Bharti Airtel stock fell 2% to 301 level. The large cap stock lost 2.26% to 301.25 on Nifty. Later, the stock closed 0.15% higher at 308.30 on the BSE. 

22 of 28 brokerages rate the stock "buy" or 'outperform', four "hold" and two "underperform", according to analysts' recommendations tracked by Reuters.

The Bharti Airtel stock is trading below its 50-day and 200-day moving average of 316 and 331.

The stock has fallen 31.19% during the last one year and is down 3.52% since the beginning of this year.

Also read: Moody's downgrades Bharti Airtel credit rating to 'Ba1' over cash flow situations and debt levels

After the downgrade announcement on Tuesday, the Bharti Airtel stock declined 4.33 per cent to Rs 293.30 on BSE. On NSE, shares dropped 4.46 per cent to Rs 292.85.

Moody's also downgraded the backed senior unsecured notes issued by the telco's Africa arm due to uncertainty around profitability, cash flow and debt levels, but the company stressed that its businesses continue to be diversified and strong.

"Moody's Investors Service ("Moody's") has downgraded to Ba1 from Baa3 the senior unsecured rating for Bharti Airtel Ltd. (Bharti) as well as the backed senior unsecured notes issued by Bharti's wholly-owned subsidiary, Bharti Airtel Int'l (Netherlands) B.V.," the agency said.

Also read:Airtel net income drops 72% to Rs 86 crore; its payments bank brings profit of Rs 1,017 crore

Credit ratings reflect a company's calibre to repay debt and raise funds. Ratings range between Aaa, which means best, to lowest category C. Ba1 rating means obligations are judged to have speculative elements and are subject to substantial credit risk, but have a superior ability to repay short-term debt obligations.

"At the same time, Moody's has assigned a Ba1 corporate family rating (CFR) to Bharti and withdrawn the company's Baa3 issuer rating. The ratings outlook is negative," Moody's report said.

The negative outlook indicates possibility of further downgrade of rating.

Playing down the rating action, Bharti Airtel maintained that its businesses continue to be diversified and strong.

"Bharti Airtel and its businesses continue to be diversified and strong. While Africa and nonmobile businesses in India exhibit healthy momentum, the continuing trend of robust growth in data volumes in India and also the imminent recovery in voice tariffs will further help overall business going forward," Bharti Airtel said in a filing.

Edited by Aseem Thapliyal

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