Bharti Airtel Shares Spike Over 8% After Q2 Results
Telecom stocks garnered investor interest in mid-morning trades on the bourses on Friday, a day after Bharti Airtel and Vodafone Idea reported their quarterly financial results. Bharti Airtel shares soared as much as 8.4 per cent to Rs 393.20 apiece on the BSE, and the Vodafone Idea stock jumped as much as 24.75 per cent to Rs 3.68. Telecom majors Vodafone Idea and Bharti Airtel had reported huge losses in the July-September period on account of high provisions for outstanding government dues.
Vodafone Idea reported a consolidated net loss of Rs. 50,900 crore in the second quarter of the current financial year. Rival private sector telecom company Bharti Airtel posted a consolidated net loss of Rs. 23,045 crore in the same quarter.
Last month, the Supreme Court had rejected telecom companies' appeal against the government's definition of adjusted gross revenue (AGR), allowing the Department of Telecommunications (DoT) to recover dues worth Rs. 1.33 lakh crore from telecom companies Bharti Airtel, Reliance Communications (RCom) and Vodafone Idea.
The verdict came as a huge relief for the telecom department and a big setback for the telecom operators, reeling under heavy debt and intense competition in the sector.
The DoT and the mobile carriers have been at odds over the definition of AGR. The companies argue that AGR should comprise just revenue accrued from core services, while the DoT says AGR should include all revenues.
Both Vodafone Idea and Airtel have been facing a tough time after the recent Supreme Court verdict upheld the government's definition of revenue.
Bharti Airtel on Thursday said that its liabilities/provisions as on 30 September stood at Rs 34,260 crore, while that of Vodafone Idea were Rs 25,677.9 crore.
Meanwhile, debt-laden Reliance Communications (RCom), which has total secured debt of about Rs 33,000 crore, has already received bids from Bharti Airtel and PE firm Varde Partners for its assets as part of its insolvency proceedings.