Bharti and Idea drop after reports foreign brokerage cuts earnings forecast for FY 2016-18

Bharti Airtel and Idea Cellular fell 1.5% and 3% respectively at 15:15 IST on BSE after media reports of a foreign brokerage cutting earnings forecast of these companies for FY 2016, FY 2017 and FY 2018.

Meanwhile, the S&P BSE Sensex was down 27.97 points or 0.11% at 24,579.02.

Bharti Airtel fell 1.5% to Rs 328.45. The stock hit a high of Rs 336.50 and low of Rs 327.05 so far during the day. On BSE, so far 1.03 lakh shares were traded in the counter, compared with an average volume of 2.89 lakh shares in the past one quarter.

Idea Cellular dropped 3% to Rs 105. The stock hit a high of Rs 108.90 and low of Rs 104.45 so far during the day. Huge volumes were witnessed on the counter. On BSE, so far 1.55 crore shares were traded in the counter as against average daily volume of 4.09 lakh shares in the past two weeks.

As per media reports, a foreign brokerage reduced Bharti Airtel's and Idea Cellular's earnings forecast for thse two companies for the forthcoming three financial years starting from the current financial year, in anticipation of increased spectrum costs and higher capex intensity. The brokerage also reportedly said that these two companies are likely to face sustained cash flow challenges through financial year ending 31 March 2016 (FY 2016) to year ending 31 March 2018 (FY 2018) amid pricing pressure, rising capex intensity on data network rollouts and mounting spectrum-linked costs.

Bharti Airtel's consolidated net profit fell 22.2% to Rs 1116.90 crore on 3.7% rise in net sales to Rs 24065.90 crore in Q3 December 2015 over Q3 December 2014.

Idea Cellular's consolidated net profit fell 0.4% to Rs 764.21 crore on 12.4% rise in net sales to Rs 9001.43 crore in Q3 December 2015 over Q3 December 2014.

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