Investment bank Morgan Stanley has downgraded the telecom major's stock to 'equal-weight' from 'overweight' and cut its target price for the stock to Rs 280 from Rs 366.

At 12:40 PM, shares in Bharti were trading at Rs 261.70, down 0.15% on the Bombay Stock Exchange.

"Tariff wars in the sector are bringing down average revenue per minute for voice calls," the bank said.

Morgan Stanley in its report has said that the traffic growth for the company is coming at the expense of operating margins.

The bank also cites the slashing of 3G rates in the past six months and the decline in overall sequential data revenue growth as reasons for the change in outlook.

Bharti Airtel reported its 10th straight quarter of profit decline as competition squeezed margins despite gaining subscriber market share from some of its smaller rivals.