In early Friday trading, Vodafone Idea Ltd. experienced a little increase in its shares as it followed the telecom operator's March quarter results. Cost reductions, according to Motilal Oswal Securities, led to a sequential increase in Q4 Ebitda of 2%. According to the statement, Vodafone Idea's revenue decreased by 1% on a quarter-over-quarter (QoQ) basis, but it was still in line with the brokerage's expectation. The 1% QoQ subscriber loss at 26 lakh was somewhat offset by 1% QoQ rise in average revenue per user (ARPU) at Rs 146. The stock increased 0.23 percent to Rs 13.24 on the BSE on Friday. As of now, the stock has lost 22% of its value.
"Reported EBITda increased 10 basis points (bps) to 40.9 percent QoQ, while reported EBITDA remained flat at Rs 43.30 billion (in line). The whole cost increase was mitigated by the 80 bps QoQ rise in roaming charges as a proportion of sales. Subscription acquisition and other expenditures decreased by 30bp QoQ, while network and licensing costs decreased by 20bp each quarter. According to the statement, pre-Ind AS Ebitda increased by 2% QoQ to Rs 21.8 billion (in line), and margin increased by 50% QoQ to 20.6%.” According to Motilal Oswal, net debt decreased by Rs 7,200 crore to Rs 2.1 lakh crore, but the adjusted net loss was unchanged on a sequential basis.
"98% of all debt was made up of debt from Spectrum and AGR. From Rs 2,000 crore to Rs 4,000 crore, market debt decreased. OCD exchanged for INR 15 billion in stock. The capex grew marginally to Rs 1,850 crore in FY24 and Rs 550 crore in 4Q.”
Kotak Institutional Equities said ahead of Vodafone Idea's quarterly results that it will incorporate a 15% pricing rise in December 2025, up from a 10% hike before, in addition to its anticipated 20% tariff hike in June 2024 following the general elections.
According to our scenario research, Vi has a large risk-reward skew (bear case Rs 7 and bull case FV of Rs 23). Long-term recovery, meanwhile, still depends on the government providing relief and reducing the level of competition. We bring back Vodafone Idea at SELL with a fair value of Rs. 10 as we wait for indications of stabilization of market share and further clarification on possible government relief measures/dilution before becoming more positive," Kotak stated.
