Motilal Oswal Maintains 'Sell' On Vodafone Idea; AGR Relief, Debt Raise Remain Key For Long-Term Survival

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Motilal Oswal Report

Vodafone Idea Ltd. continues to lose market share to peers due to lower average revenue per user translation, given its inferior subscriber mix and elevated subscriber churn.

It plans to embark on a significant capex cycle (Rs 500-550 billion over the next two-three years) to bridge the network gap with peers.

Despite the likely capex, we believe regaining subscribers would be a tall ask for Vodafone Idea, given its peers’ superior free cash flow generation and deeper pockets.

Further, we believe the company’s network investments remain contingent on debt raise, which, in turn, is dependent on continued support/AGR relief from Government of India (Rs 200 billion+ annual cash shortfall over FY26-31E).

Stabilization of the subscriber base, along with further relief from the GoI, remains imperative for Vodafone Idea's long-term survival.

Our revenue and Ebitda estimates for FY26-27E remain broadly unchanged.

We reiterate our Sell rating on Vodafone Idea with an unchanged target price of Rs 6.5, based on DCF implied ~13x Jun’27E enterprise value/Ebitda.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.