Moody's retains stable outlook for Bharti Airtel

Company reported its results for the first quarter of 2015-16, with revenues up 3.1%

Moody's has retained stable rating outlook for the country's top telecom operator Bharti Airtel as it expects the telco to continue to grow its core Indian and African wireless businesses.

"Bharti Airtel Ltd.'s operating performance for the first quarter ended 30 June 2015 (1Q 2015/16) continues to support its Baa3 credit profile," Moody's said in a statement.

The stable rating outlook reflects Moody's expectation that Bharti will continue to grow its core Indian and African wireless businesses, and that the group will continue to deleverage on both an absolute and relative basis.

Moody's said Bharti reported its results for the first quarter of 2015-16, with revenues up 3.1 per cent year-on-year to Rs 237 billion (USD 3.7 billion).

"Revenues from India, the largest revenue contributor, grew 10 per cent from the prior year. Bharti also reported EBITDA of Rs 83 billion and an EBITDA margin of 34.9 per cent in 1Q 2015/16," it added.

On a reported basis, the company's leverage metrics for last 12 months ended June 30 appear higher than our downward rating triggers, it said.

"After considering the pro forma effect of debt reduction from expected African tower asset sales and debt refinancing with the USD 1 billion issuance in June, credit metrics for the 12 months to June 2015 remain broadly in line with expectations.

"Strong momentum in Bharti's Indian businesses also continue to support its Baa3 credit profile," said Annalisa Di Chiara, Moody's Vice President and Senior Analyst.

In India, revenue growth was driven by mobile services, reflecting the robustness of voice demand and a growing data segment. Mobile data revenue was up 67.3 per cent in the first quarter and contributed 19.2 per cent of mobile segment revenues, compared to 12.4 per cent in the same quarter last year.

At the same time, Moody's said Bharti's African operations reported an 11.6 per cent year-on-year decline in revenue, contributing around 26 per cent of total revenues.

"Although revenue growth remained sluggish, mobile data revenue grew by 48.5 per cent year-on-year to USD 128 million, and now represents 12.9% of total mobile revenue," it added.