Bharti Airtel and Bajaj Auto shares fell today after Nigeria, which is one of their biggest overseas markets, announced a devaluation of its currency naira. Nigerian central bank has pegged the Naira at 168 to the US dollar, which is 8.4 per cent lower than its previous peg of 155/dollar.
Bajaj Auto fell as much as 2.8 per cent shares while Bharti Airtel shares slipped 1.8 per cent.
Nigeria accounts for 25-30 per cent of Bajaj's total exports, representing about 13-15 per cent of its total revenues. Bajaj bills its deals in US dollar. The realization from Nigeria might not be impacted in the short term as prices are fixed in much in advance, traders say. But the devaluation of would hit pricing power of its Nigerian customers and dealers may subsequently may ask for a cut in dollar-denominated purchase price, hitting Bajaj's revenues.
UBS has downgraded Bajaj Auto to "sell" from "neutral", saying falling emerging market currencies would impact margins.
For Bharti, Nigeria is its biggest African market, accounting for nearly one-third of its total African revenues. But on an overall basis, Nigeria accounts for 10 per cent of its overall revenue.
At 10:27 am, Bharti Airtel shares were down nearly 1 per cent while Bajaj Auto shares were 1.9 per cent lower. In comparison, Nifty was almost flat. (With Agency Inputs)
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