Chennai: Global telecommunications major Bharti Airtel’s focus on high paying customers and reduction in capital spending may help the company improve cash flows over the next 12 months, S&P Global Ratings has said.
The telco has been taking measures around deleveraging with a sixeable debt to potentially lower debt levels over the next three months. S&P has said the move would be key to stabilising the rating at the current level in its report which did not include any rating action.
S&P said higher capital spending and depreciation of the Indian rupee partly offset the benefits of a recent $1.5 billion equity infusion in Airtel’s African operations and further additional equity of $200 million infusion through a minority stake sale in its African operations, which should further help deleveraging.
However, the agency said the operating performance of Airtel’s Indian mobile services is showing signs of bottoming out.
“The slowdown in its quarterly revenues eased to negative 0.6 per cent. We expect the company’s new minimum recharge requirements, renewed focus on high-paying customers, and a likely tapering of capital spending could help shore up its operating cash flows over the next 12 months,” S&P said.
Earlier this week, Moody’s Investor service for the first time lowered the credit rating of Bharti Airtel to Ba1 from Baa3. Credit ratings reflect a company’s calibre to repay debt and raise funds.