Shares of Bharti Infratel Ltd wiped off their early losses and ended the session higher by 2.8 per cent at Rs 441.95 on the BSE. On the NSE, the stock gained 2.85 per cent to Rs 441.95.
Earlier in the day, the shares dropped as much as 2.3 per cent to Rs 420 as the company has reported a 17 per cent drop in its consolidated net profit to ₹638 crore for the second quarter ended September 30, compared with ₹774 crore in the same period last year.
However, consolidated revenue for the July-September quarter rose by 11 per cent year-on-year (YoY) to ₹3,648 crore against ₹3,292 crore in the corresponding period last year.
Core rental revenues from mobile towers came in below estimates due to a slump in new tenancy additions, according to CLSA analysts.
“Slump in new tenancies was due to the combined impact of slowdown in site rollout by Reliance Jio and exit of smaller operators," they said.
The tower infrastructure company had said on Monday said its board of directors has decided to explore acquisition of stake in Indus Towers.
The company is looking at acquiring the stake in one or more tranches in Indus Towers with an aim of making it a subsidiary or wholly-owned subsidiary of Bharti Infratel, it said.
“The merger will likely improve Bharti Infratel's capital structure,” said CLSA, which has a “buy” rating on the stock with a target price of Rs 490.
9 of the 26 analysts covering the stock have a “buy" rating, 11 have “hold, while 6 rate it “sell"; median target price is Rs 405, according to Thomson Reuters data.
The stock had risen about 25 per cent this year up to Monday's close.
(With inputs from Reuters)