Hits intra-day 52-week low on both the NSE and the BSE on Thursday
The scrip of the country’s biggest telecom company Bharti Airtel took a beating at the bourses for the second consecutive day on Thursday. Besides weak financial performance, downgrading of the stock by a slew of investment houses including Goldman Sachs and Standard Chartered further aggravated the downfall of the stock.
Goldman Sachs report removed the stock from its Asia Pacific Buy List and downgraded it to ‘neutral’ from ‘buy’ and reduced its target price by 22 per cent to Rs 270. “We expect operational momentum to be relatively weak in India and Africa going forward. We see further downside risks to consensus estimates if Bharti continues to maintain or regain market share at the expense of profitability,” added the report.
The stock hit an intra-day 52-week low on both the NSE and the BSE at Rs 254.30 and Rs 254.50 respectively. It, however, marginally recovered thereafter to end the day at Rs 256.85, down 6.40 per cent on the BSE.
This came a day after the stock tanked by over six per cent on Wednesday following the announcement of a 37-per cent decline in net profits in its first quarter results ended June 30. The sharp fall pushed the telecom major out of the top-10 list in terms market-capitalisation.
The net profit for the quarter stood at Rs 762 crore against Rs 1,215 crore in the year-ago period.
Associate Analyst, IT and Telecom, Angel Broking, Ms Ankita Somani said: “The stock has seen a decline of over 10 per cent in the last two days. Disappointing margins in its quarterly results along with the overall imbroglio in the telecom sector which has remained an overhang on all telecom stocks triggered the stock fall. The fear among investors is of margins declining both in India and Africa and the management stating its stand of focussing on gaining revenue market share rather than saving margins.”