Bharti Airtel slips as CLSA downgrades stock to 'underperform'

NEW DELHI: Shares of Bharti Airtel slipped as much as 1.32 per cent in early trade on Wednesday after the global brokerage house CLSA downgraded the stock to ‘Underperform’ from ‘Buy’ and also cut the target price to Rs 380 from Rs 393 earlier.

The scrip was trading 0.10 per cent down at Rs 361. Shares of the telecom major opened at Rs 359.96 and touched a high and low of Rs 361.95 and Rs 356.55, respectively, in trade so far. Benchmark BSE Sensex was up 40.88 points, or 0.14 per cent, at 29,483.51.

Of late, Bharti Airtel has come up with a new revamped plans to offer 1 GB 4G data per day bundled with unlimited calls to counter Reliance Jio's prime plans.

Airtel's Rs 345 plan now offers 1GB of 4G data per day along with local and STD voice calls free per month.

According to CLSA, Airtel’s new offer will limit churn but will dilute ARPU, also known as average revenue per user.

“Lower FY18-19CL revenue by around 10 per cent and EBITDA by 17-19 per cent to factor in ARPU dilution. However, reduction in dual-sims, sector consolidation at fast pace could provide upside,” the brokerage house said.

For the quarter ended December 31, 2016, the company reported a net profit of Rs 421.80 crore, down 76.35 per cent, against Rs 1783.30 crore in the corresponding quarter last year.