MUMBAI (Reuters) - Shares in India's top telecoms carrier Bharti Airtel fell on Wednesday to their lowest intraday level in almost four years after Credit Suisse downgraded its stock, joining other Western banks in lowering its outlook this month.
The main risk to firms including Bharti was competition from the telecoms arm of conglomerate Reliance Industries, the bank said. Bharti's shares have lost nearly 15 percent since reporting weak earnings this month, and could fall further, Credit Suisse said.
Reliance, controlled by India's richest man Mukesh Ambani, is gearing up to launch commercial services through its unit Reliance Infotel towards the end of 2012 or early next year, sources have told Reuters.
Reliance Infotel should look to enter India's voice services, Credit Suisse said, a move which would pose "significant risks" to incumbent wireless service providers like Bharti. Intense competition in India's mobile sector has already squeezed margins industrywide.
"Despite the recent sharp correction in Bharti's stock price, we believe that risks from key events over the next 12 months are not fully understood or appreciated by the street," Credit Suisse said in the note dated August 21.
Credit Suisse downgraded Bharti to "underperform" from "neutral", while cutting its target price to 220 rupees.
Shares in Bharti were down 3.42 percent at 249.70 rupees by 0828 GMT, underperforming a 0.1 percent rise in the broader NSE index. The stock hit a session low of 248.95 rupees, its lowest intraday level since October 2008.
Profits at Bharti, which is part-owned by Southeast Asia's top mobile company SingTel, have fallen for 10 straight quarters, also hit by its money-losing African business.
Morgan Stanley, Goldman Sachs, and Standard Chartered downgraded Bharti in August after it reported disappointing quarterly earnings.
(Reporting by Devidutta Tripathy and Abhishek Vishnoi; Editing by Rafael Nam)