In response to rumors that the Department of Telecommunications (DoT) had sent the business a notice over non-payment of bank guarantees needed to settle past spectrum auction dues, Vodafone Idea Ltd.'s shares fell 9% during Monday's trading session. Amidst widespread selling in the overall market, the scrip also dropped ahead of the opening of the September quarter (Q2) results season.
As per media sources, the new warning was issued because the JV between the Vodafone Group and Aditya Birla Group failed to file bank guarantees on time for prior spectrum dues for auctions performed before 2022. The reports could not be independently verified by Business Today.
Vodafone Idea's stock fell 9.08 percent on Monday, reaching a low of Rs 8.91 on the BSE. The telecom share has dropped 47% in 2024 thus far, and 31% in the last month.
Regarding the telecom operator's quarterly reports, most experts anticipate that Vodafone Idea's sales would increase by 5% YoY and that its losses will decrease. A few brokerages set their target price for the stock at Rs 10.Kotak Institutional Equities anticipates Vodafone Idea to announce a loss of Rs 6,741 crore. This compares to an adjusted loss of Rs 8,738 crore from a year ago and Rs 6,432 crore from the June quarter.
"We see revenue growth of 7% QoQ on an increase in ARPU driven by tariffs, somewhat offsetting the ongoing fall in subscriptions. With increasing ARPUs, reported Ebitda is expected to rise by 10% to 11% on a quarterly basis. We project that the EoP subscriber base would drop by 2 million QoQ (compared to -2.5 million QoQ) to 208.1 million, and ARPU will rise by 9% QoQ to Rs 159 per month as a result of rate increases and ongoing improvements to the subscriber mix, according to Kotak. The firm has set a target price of Rs 10 for Vodafone Idea shares, with a "Sell" rating.
JM Financial has maintained its 'Sell' rating for Vodafone Idea, with a target price of Rs 10. In our bull case scenario, VIL's fair value could jump to Rs 15 per share assuming: a) sharper tariff hikes driving ARPU to Rs 300 by FY30, it’s able to hold on to its current subscriber base of 21 crore; extension of moratorium and/or partial equity conversion of government dues depending upon VIL’s evolving liquidity position.
Vodafone Idea's Q2 loss is estimated by this brokerage to be Rs 6,421 crore. Revenue is expected to increase 5% YoY to Rs 11,257 crore.
On Vodafone Idea, MOFSL is 'Neutral' and has recommended a target price of Rs 10.
It projects 5% QoQ revenue increase, given that ongoing subscriber attrition may partially offset the effect of the rate hike. The brokerage anticipates a 5% quarterly increase in reported EBITDA and a 30 basis point quarterly increase in EBITDA margin to 40.3%.
"The subscriber base is predicted to continue to fall by 40 lakh, while ARPU is forecast to climb 7% QoQ to Rs 156. Anticipate the launch of 4G and 5G networks in 2HFY25," it stated.
Vodafone Idea's core loss, according to Nuvama, is Rs 6,394 crore. "We project 9.6% quarterly revenue increase, supported by higher ARPU. The QoQ growth in EBITDA margin might be 430 bps. Plans to expand network capacity and halt subscriber reduction are important metrics to track," it stated.
