Bharti Airtel stock plunges over 6 pc to one-year low

MUMBAI: Shares of Bharti Airtel plunged over six per cent weighed down by investors' fear that a tariff war could erode future profits, although third quarter net was up 13 per cent. During the day's trade, the company's top-valued telecom firm saw its stock falling to Rs 290.55, its lowest in a year, at the Bombay Stock Exchange. It later settled at Rs 292.15, down 6.38 per cent from the previous close.

At the National Stock Exchange, the stock fell 6.19 per cent to close at Rs 292.50, after hitting an intra-day low of Rs 290.15, a 52-week low at this bourse.

Today's fall in the company's share price, following which Bharti Airtel has seen about a third of its market value getting eroded in a month, followed investors selling off the stock

heavily despite a net profit growth of 13 per cent being reported for the third quarter earlier in the day.

The scrip lost over 11 per cent in one week and over 30 per cent in the past one month amid a tariff war to garner market share, which investors fear would come at the cost of profit margins.

Bharti Airtel also today joined the bandwagon of operators offering a per-second call rate.

With competition hotting up and many telcos offering low tariffs, Bharti Airtel saw a 24 per cent drop in average revenue per user in Q2 to Rs 252 with 52 per cent of the new additions coming from the low-paying rural subscribers.

Analysts said shares of the country's largest private sector telecom operator dropped on concerns of rising competition in the telecom sector and dirt-cheap tariff being offered by some of the existing as well as new players.

Bharti Enterprises Deputy Group CEO and MD Akhil Gupta said, "With intense competition and irrational pricing in some pockets in the short term, we could see some impact on the top and bottom lines."

On the National Stock Exchange, Bharti Airtel ended down 6.19 per cent at Rs 292.50. During the trading hours, the scrip had witnessed a low of Rs 290.10. On the volume front, 3.95 crore shares changed hands on both the bourses.

Bharti Airtel today reported a 13 per cent rise in the second quarter net profit at Rs 2,321 crore as cheap call rates offered by competitors and rising number of low-tariff customers pulled down the rate of growth. link....