Vodafone Idea's share price increased 13.26% intraday, reaching a high of ₹15.05 on the NSE, after CARE Ratings upgraded the company's Long Term Bank Facilities from B+ to BB+, indicating a stable outlook. Additionally, the Short Term Bank Facilities have been upgraded from A4 to A4+.
The corporation made the announcement after market hours on Tuesday. On June 4, the stock closed at ₹13.20, down nearly 17% on the day of the vote count. This dip was a reaction to the election results, which showed that the Bharatiya Janata Party (BJP) fell short of achieving a majority on its own. Despite this, the BJP is projected to create a government with the help of its allies.
The brokerage firm maintains a 'sell' recommendation on the stock, expecting it to sink below ₹8. However, they also outline a bullish scenario with a goal of ₹200. This optimistic prediction expects large rate hikes, driving ARPU to ₹300 by FY30 and ₹200 by FY26. Furthermore, the business would need to maintain its current subscriber base of 213 million, as opposed to the 188 million envisaged in the base case by FY30.
Furthermore, JM noted that, based on VIL's evolving liquidity condition, an extension of the moratorium beyond FY26/FY27 and/or partial equity conversion of GoI dues may be considered.
Vodafone Idea's net loss for the fourth quarter of FY24 increased to ₹7,675 crore, up from ₹6,986 crore in the previous quarter, which included an extraordinary gain. The financially challenged telco continued to face enormous debt and subscriber losses.
However, operationally, the joint venture between the UK's Vodafone Group Plc and India's Aditya Birla Group showed improvement, reporting its highest-ever quarterly earnings before interest, tax, depreciation, and amortization (EBITDA) after the 2018 merger of ₹2,180 crore.
