Vodafone Idea shares decline post investor call; Citi, CLSA see upside potential

Shares of Vodafone Idea’s (Vi) reacted negatively on Tuesday, falling 4 per cent, as brokerages were divided on the company’s prospects. Continued subscriber losses and weaker data net adds remain key concerns.

The telecom major’s net loss narrowed by 6.6 per cent to ₹7,166 crore in the fourth quarter of FY25. Vi CEO Akshaya Moondra on Monday disclosed in an analysts’ call that the company is engaged with government to find a solution to the AGR matter.

Domestic brokerage Motilal Oswal stressed that the telecom major continues to lose market share to peers due to lower ARPU translation, given its inferior subscriber mix and elevated subscriber churn.

“Despite the likely capex, we believe regaining subscribers would be a tall ask for Vi, given its peers’ superior free cash flow generation and deeper pockets,” Motilal Oswal said, reiterating sell rating at an unchanged target price of ₹6.5.

“Stabilisation of the subscriber base, along with further relief from the government, remains imperative for Vi’s long-term survival,” it added.

With no relief on AGR dues and no breakthrough on the debt raise, Motilal believes Vodafone Idea is likely to face an annual cash shortfall of ₹20,000 crore and may be unable to meet its capex guidance of ₹50,000 crore - ₹55,000 crore over FY25-27 estimates.

ICICI Securities’ maintained a hold rating at a reduced target price of ₹7 from ₹8. Key downside risks according to the brokerage, include lower-than-expected AGR revenue market share, and 4G subscriber base. It added that the company fails to get more equity capital. Higher-than-expected revenue market share and FCF generation are upside risks. 

Meanwhile, global brokerage CLSA maintained an outperform rating on the stock at a target price of ₹8 per cent, while Citi maintained buy at ₹10 per share (42 per cent upside potential from the previous close of ₹7.04).

The stock traded 2.84 per cent lower on the BSE at ₹6.84 as at 2.48 pm, hitting a low of ₹6.75 from the previous close of ₹7.04.

More Like This

Published on June 3, 2025