Shares of debt-ridden Vodafone Idea (Vi) fell nearly 3% to Rs 7.51 in Thursday’s intraday trade on BSE after the telecom operator’s consolidated net loss for the quarter ended December 2022 widened to Rs 7,990 crore from Rs 7231 crore a year ago, and Rs 7,596 crore a quarter ago.
However, its consolidated revenue increased by 9.3% in the year to Rs 10,621 crore.
Sequentially, the topline was flat. Consolidated operating profit, calculated as earnings before interest, taxes, depreciation and amortization (EBITDA), rose to Rs 4,181 crore from Rs 4,098 crore a quarter ago, and Rs 3,817 crore a year ago.
Operating margin improved to 39.4% from 38.6% a quarter ago, and 39.3% a year ago. The blended average revenue per user (ARPU) improved to Rs 135 from Rs 131 a quarter ago.
However, the telecom operator continued to lose subscribers. Its subscriber base as of December 31 was 228.6 million, compared with 234.4 million a quarter ago. The total number of data subscribers for the company was steady at 135.3 million at the end of the December quarter.
At 10.19 am, the scrip was trading 2.8% lower at Rs 7.53 on BSE. The stock has fallen about 30% in the last one year.
Should you buy, sell or hold Vodafone Idea’s stock? Here’s what analysts say:Yes Securities
Yes Securities maintained a Reduce rating on Vodafone Idea with a target price of Rs 7.5.
“It continues to lose subscribers (mainly in 2G segment) and that adversely impacts revenue growth. The addition of 4G subscribers remains muted. We expect that 2G to 4G migration would continue to drive ARPU growth. We expect EBITDA margin to improve in near term led by lower SUC charges and some savings on rental after a recent renegotiation with Indus Towers,” it said.
Kotak Institutional Equities
Kotak Institutional Equities rating remained suspended on lack of investment case for Vi’s revival.
“Despite recent GoI equity conversion, fund-raising remains imperative to arrest market share declines. We believe Vi’s fund-raising would remain an uphill battle, given large upcoming repayments, overdue vendor payments and another round of potential large equity dilution post moratorium,” it said.
Motilal Oswal
Motilal Oswal reiterated its Neutral rating on Vodafone Idea with a target price of Rs 8.
“The much-awaited capital raise remains critical to providing immediate liquidity for network expansion. The significant amount of cash required to service debt leaves limited upside opportunities for equity holders, despite the high operating leverage opportunity from any source of ARPU increase. The current low EBITDA will make it challenging to service debt without an external fund infusion,” Motilal said.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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