Brokerages are cautious on Bharti Infratel after the company reported a 21 percent drop in its consolidated net profit to Rs 704 crore for the first quarter ended June. The net profit stood at Rs 887 crore in the corresponding quarter of the previous year.

Share Market Live

NSE

The company had benefited from certain one-off gains with respect to operating expense reversal and tax-related reversal. The consolidated revenues for Q1 FY21 came in at Rs 3,505 crore, 6 percent lower year-on-year.

Global brokerage firms Jefferies and Morgan Stanley maintained a bearish view on the stock post its June quarter earnings.

Jefferies maintained an 'underperform' call on the stock with a target at Rs 175 per share. It said that Q1 of the company disappointed, with revenue, EBITDA and profit missing estimated. However, core rental revenue and core EBITDA were marginally ahead of estimates, it added.

Morgan Stanley also has an 'underweight' call on the stock with a target at Rs 175 per share. It said that the gross tenancy additions were lower due to the pandemic and lower exit penalties, past tenancy deletions and negative energy margin dragged its EBITDA.

"The ongoing COVID-19 crisis has emerged as a significant global public health challenge while bringing economic activity to a virtual standstill in many countries. India is also witnessing an unprecedented crisis on account of the same," Bharti Infratel Limited Chairman Akhil Gupta said.

The resilience shown by the telecom industry as a vital service even in the wake of extreme exigencies like COVID-19 bears well for the future potential of the infrastructure industry, he said. "We remain fully prepared in maintaining and strengthening our leadership position going forward," Gupta added.

The stock fell as much a 3.4 percent to Rs 187.85 per share on the BSE in intra-day deals.