Moody's keeps Bharti Airtel's rating unchanged

Moody's Investors Service today said it has retained Bharti Airtel's Baa3 rating and kept its outlook as stable.
"The rating affirmation is underpinned by strong cash flow generation of Bharti's Indian operations, particularly in wireless voice and data, where it enjoys a well-established and leading market position under the Airtel brand," Moody's V-P and Senior Credit Officer Annalisa DiChiara said in a statement.
Moody's has affirmed Bharti Airtel Baa3 issuer and senior unsecured debt rating as well as Baa3 on senior unsecured notes issued by Bharti Airtel International (Netherlands) BV, which are irrevocably and unconditionally guaranteed by Bharti Airtel, it added.

Moody's said Bharti reported a 3.7 per cent year-on-year increase in consolidated revenue at Rs 24,100 crore. All key business lines in India reported healthy yoy improvements.
"Revenue growth of 8.8 per cent yoy was driven by a 10.1 per cent growth in mobile services, reflecting continued robustness of voice demand and a growing data segment. Mobile data revenue was up 50.6 per cent yoy in the third quarter of 2015-16 and contributed 23.1 per cent of mobile segment revenues compared with 16.2 per cent in the previous fiscal," it added.
At the same time, Bharti's African operations, which accounted for 26 per cent of total revenues, reported a 4.6 per cent annual increase in revenue on constant currency basis and adjusting for the impact of divestment of tower revenues.

"The rating affirmation also reflects its expectation that Bharti will continue to grow its core Indian and African wireless businesses while maintaining a prudent approach to capital spending and leverage, funding all capex from cash from operations and monetising assets to support debt reduction," added DiChiara, who is also Moody's Lead Analyst for Bharti.
The stable outlook reflects expectations of strong cash flow generation of its Indian operations and the application of cash proceeds from asset sales to reduce debt on an absolute and relative basis, it added.