Vodafone Idea shares in focus as losses narrow in Q2; Citi sees stock at ₹14

Shares of Vodafone Idea Ltd. will be in focus on Tuesday, November 11, after the telecom operator reported a sequential improvement in earnings, with losses narrowing in the September quarter led by a one-time interest expense reversal.

Revenue rose 1.6% quarter-on-quarter (QoQ) to ₹11,200 crore, ahead of expectations of flattish growth, while EBITDA margin improved marginally to 41.9% from 41.8% in the previous quarter.

The company's Q2 net loss narrowed to ₹5,500 crore from ₹6,600 crore in the June quarter, better than Street estimates of a ₹6,800-crore loss, aided by lower interest costs.

	Q3FY24	Q4FY24	Q1FY25	Q2FY25	Q3FY25	Q4FY25	Q1FY26	Q2FY26
Loss	-6985.9	-7674.6	-6432.1	-7175.9	-6609.3	-7166.1	-6608.1	-5524.2

Cash EBITDA (ex-IndAS) grew 3% QoQ to ₹2,250 crore, which is 2.5% above estimates.

Subscriber base declined by 1 million sequentially, while average revenue per user (ARPU) improved to ₹167 from ₹165 in the previous quarter.

Vodafone Idea's gross debt, including accrued interest, stood at ₹2.03 lakh crore, comprising ₹2.01 lakh crore in deferred spectrum and AGR liabilities and ₹1,530 crore owed to banks and financial institutions.

The telco's capex for the quarter declined 28% QoQ due to delays in debt raising.

The Supreme Court has recently allowed the government flexibility to reassess and reconcile all past adjusted gross revenue (AGR) dues up to FY17, including interest and penalties, a move that could ease financial pressure on the company.

Brokerage firm Citi has maintained a 'Buy' rating on Vodafone Idea with a target price of ₹14, categorising it as a high-risk stock.

The brokerage said the Supreme Court clarification on AGR dues could pave the way for the telco to complete its long-pending fundraise.

"Progress on the debt raise and clarity around the contours of the government's relief package will be key monitorables going ahead," Citi added.

UBS, which has a 'Neutral' rating on the stock with a price target of ₹9.7, said it will look for commentary on:

- Ongoing capex and network deployment,

- Progress on 5G service launches,

- Updates on the planned debt raise,

- Further developments on relief measures related to AGR and spectrum, and

- The overall outlook for the near to medium term.

Vodafone Idea's management will hold a conference call at 2:30 pm today to discuss the quarterly performance.

Shares of Vodafone Idea Ltd. ended Monday's session 0.83% lower at ₹9.53. The stock is up 9% in the last one month.