Moody's Changes Bharti Airtel’s Outlook To Positive; Affirms Ratings

(The Corner Office Journal) -- Moody's Ratings changed Bharti Airtel Ltd.'s outlook to positive from stable and affirms the Indian telecom operator’s Baa3 ratings.

"The change in outlook to positive reflects a significant improvement in Bharti's financial profile and its steadily increasing market share, supported by structural changes in India's fast growing mobile sector,” Moody's Ratings Vice President and Senior Credit Officer Nidhi Dhruv said in a statement.

Dhruv, who is also the lead analyst for Bharti, said easing competitive intensity and expectations of a relatively supportive regulatory environment also contributed to the positive outlook.

Moody's affirmed Bharti’s Baa3 issuer rating and the Baa3 senior unsecured debt rating on the bonds issued by the company.

The rating agency said the affirmation reflects Bharti’s position as one of the two leading operators in India's high-growth mobile market given the favorable demographics, its pan-India network and large spectrum holdings.

Bharti is also one of the three largest telecom service operators globally in terms of subscribers (563 million), it noted.

Prudent Financial Policies

Moody's said Bharti's prudent financial policies are reflective of the sustained improvement in its leverage through debt reduction. In particular, the repayment of higher cost deferred spectrum liabilities from cash surpluses has accelerated its deleveraging targets, it added.

With prepayment of 200 billion rupees ($2.30 billion) of spectrum liabilities during the fiscal year ending 31 March 2025 (FY25) alone, Bharti's consolidated leverage -- as measured by adjusted debt/EBITDA -- will improve to 2.6x at March 2025, Moody's said.

The rating agency said improving earnings and scheduled debt repayments will further pave the way for leverage to improve to 2.2x by March 2026.

Moody's said Bharti's liquidity is excellent with a well staggered debt maturity profile, and around 60% of its debt (excluding leases) are maturing beyond March 2029. The company also retains very strong access to domestic and international bank and capital markets, it noted.

Note: $1 = 86.4857 Indian rupees

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