Crisil, a ratings agency has upgraded the long-term rating of Bharti Airtel Ltd to AA+. The agency pointed out that the business outlook is stable and cited continued improvement in the operating metrics of the company. The ratings agency also reaffirmed the short-term rating of Airtel. It is expected that the company will show further improvement in the overall credit risk profile over the near to medium term with support from improving cash accruals and deleveraging plans such as the rights issue.
Bharti Airtel Gets AA+ Rating For Long-Term
It has been stated by Crisil that the AA+ rating is notwithstanding the adjusted gross revenue (AGR) dues and additional expenditure made to acquire spectrum at the auction that was held in March this year.
Notably, on Tuesday, Bharti Airtel fell by 3.70 percent and settled at Rs 695.85 on NSE. So far, Airtel’s stock has gained more than 40 percent since the advent of this year while rivals Vodafone Idea’s stock marked a fall of 15 percent and RIL’s stock gained 20 percent.
Crisil calls this outlook to be stable and said that the business risk profile taken by Airtel will continue to benefit from the presence in diversified businesses and establish a healthy market position in the country’s mobility business. Also, the financial risk profile will benefit from the right issues as well as the expected inflow of cash accrual.
As per the agency, the ratings will continue to reflect the strong market position of Airtel in the industry and improve its operating performance of both mobile and non-mobile segments in the country, healthy operations in Africa, diversification across businesses, high financial flexibility and improving debt protection metrics. It is said that these strengths of Airtel are offset partially by its exposure to technological and regulatory risks.
Notably, Crisil expects the ARPU to improve due to the recent revisions in some plans and upgrading of plans by subscribers. It is expected that these trends will result in further improvement in the overall operating profile and revenue. Also, it believes that there will be a hike across its tariff plans in the next 6 to 9 months.