Bharti Airtel gains 3% as Moody’s affirms Ba1 corporate rating

NEW DELHI: Shares of Bharti Airtel gained almost 3 per cent in Wednesday's session after Moody’s affirmed the telecom major’s Ba1 corporate family rating and senior unsecured rating as well as the Ba1 rating on backed senior unsecured notes sold by Bharti Airtel International (Netherlands) BV.

The counter rose to a high of Rs 781 on the National Stock Exchange as against the previous close of Rs 758.90.

"The outlook change to positive reflects Bharti's improving operating performance and credit metrics which, if sustained, could support an upgrade to investment grade within the next 12-18 months," Annalisa Di Chiara, senior vice president at Moody's, said in a statement.

The move comes in the wake of Bharti Airtel announcing a sharp rise in prepaid mobile tariffs, which would boost the telecom service provider’s financial performance in a significant way.

Earlier this week, the Sunil Mittal-led company announced a 20-25 per cent increase in prepaid mobile tariffs.

Moody’s said that the continued expansion of profitability, especially in the core Indian mobile business, coupled with a steady reduction in balance sheet debt, is needed to ameliorate the potential effect on Bharti’s credit metrics of investment in fifth generation technology.

Bharti Airtel posted a 27 per cent on-year increase in consolidated earnings before interest, taxes, depreciation and amortization to Rs 27,000 crore in April-September.

Moody’s is of the view that the company’s consolidated adjusted Ebitda could rise to Rs 57,000-58,000 crore by the end of fiscal 2022, implying a 25 per cent on-year increase.