Bharti Airtel: Moody’s Upgrades Outlook to Positive on Improved Finances

Moody’s Ratings has upgraded its credit rating and outlook on Bharti Airtel to ‘positive’ from ‘stable’, citing the second-largest Indian telecom operators improved financial profile and steadily increasing subscriber market share, as it continues to gain users from third-largest Vodafone Idea Limited.

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Moody’s Upgrades Bharti Airtel’s Credit Rating

The ratings agency has affirmed Bharti Airtel’s Baa3 issuer rating and the Baa3 senior unsecured debt rating on bonds issued by Bharti. Simultaneously, the agency revised Bharti’s outlook to positive from stable.

Moody’s added that it “could upgrade Bharti Airtel’s rating to Baa2 if there is sustained improvement in the company’s profitability, and there are no adverse changes in the regulatory environment in its key operating countries.”

“The change in outlook to positive reflects a significant improvement in Bharti’s financial profile and its steadily increasing market share, supported by structural changes in India’s fast growing mobile sector. Easing competitive intensity and our expectations of a relatively supportive regulatory environment also contribute to the positive outlook,” said Nidhi Dhruv, Moody’s Ratings Vice President and Senior Credit Officer.

“Bharti’s established market position in the resilient Indian telecom industry, solid financial profile with leverage trending towards 2.0x, demonstrated access to capital markets and supportive shareholders position it well to be rated above India’s sovereign rating,” added Dhruv. “However, the linkages with the Indian economy constrain Bharti to be rated no more than one notch above the sovereign.”