Airtel shares hit a 10-year high on Wednesday after India’s largest telecom operator posted better-than-expected numbers for the quarter ended 30 September despite the ongoing pressure from Reliance Jio.
Airtel shares hit a 10-year high on Wednesday after India’s largest telecom operator posted better-than-expected numbers for the quarter ended 30 September. The stock of Airtel was the biggest gainer on both Sensex and Nifty and advanced 8.66% to hit the record high of Rs 540.75 on BSE. As the Indian telecom sector is undergoing challenges triggered by the disruptive player Reliance Jio, the profitability of all of the existing telecom companies has been adversely affected.
Despite facing tariff wars and heightened pressure of retaining customers, Bharti Airtel’s fiscal second quarter financial results beat most analyst estimates even as its consolidated adjusted net profit plunged 77% and revenue fell 10.4% on-year on an underlying basis. A huge trading volume has been witnessed in the stock of Bharti Airtel as more than 1.6 crore shares exchanged hands on both BSE and NSE in just two hours of trading activity till 11:20 am.
India’s largest telecommunication services company’s July-September adjusted net profit fell to Rs 343 crore from Rs 1,461 crore in the same quarter a year ago, as competitive pressure from Reliance Jio continued to weigh, leading to a sharp drop in its India revenues. Bharti Airtel’s aggressive tariff offers to counter relentless competition from Reliance Jio hurt earnings, and the ongoing tariff war in the telecommunication sector led to a sharp fall in the money earned per customer.
“Mobile market continues to experience value erosion and financial stress led by competitive pressures,” Bharti Airtel said in a statement. “The financial stress in the industry continues due to double-digit revenue decline and will be further accentuated by the reduction in IUC rates in the next quarter,” Bharti Airtel’s India and South Asia MD and CEO Gopal Vittal said in a statement.
Meanwhile, Indian stock markets hit record highs on Wednesday as investors sentiments got a boost after India ranked 100th for the first time in the World Bank’s Ease of Doing Business ranking 2018. The benchmark Sensex jumped as much as 346.98 points to hit an all-time high of 33,560.11 points while the broader Nifty 50 index advanced 95.45 points to mark a lifetime high of 10,430.75 points.