Airtel’s earnings growth slow but balance sheet strong enough to support elevated 5G capex: S&P Global

Kolkata: Global rating agency, S&P Global has said Bharti Airtel’s earnings growth momentum is slower than anticipated but its balance sheet is strong enough to withstand its temporarily elevated 5G-related capex spends.

“Airtel maintains its focus on deleveraging….it aims to pare debt before increasing shareholder returns, and its ratio of funds from operations (FFO) to debt has solidified within the threshold commensurate with the ‘BBB-‘ rating, supported by rising earnings,” S&P Global Ratings said in an official statement Friday.

The ratings agency has estimated Airtel’s FFO-to-debt ratio was at 25%-26% in FY23, well above its downgrade threshold of 20%. This was up from 22% in FY22. Going forward, it projects this ratio to further improve to 26%-29% in FY24.