Morgan Stanley on Tuesday downgraded Bharti Airtel to "equal-weight" from "overweight" and cut its target price to Rs. 280 rupees from Rs. 366.
Morgan Stanley said traffic growth was coming at the expense of operating margins as tariff wars in the sector bring down average revenue per minute for voice calls.
It added that 3G rates have also been slashed in the past six months, while overall sequential data revenue growth was declining.
Bharti Airtel has suffered a rash of downgrades this month, sending shares to their lowest since Oct 2006 on Aug 10 after posting disappointing April-June earnings.
Bharti's shares were down 0.6%.