Brokerages maintained divergent views on Vodafone Idea following its second-quarter results, with JM Financial retaining its Add rating and JPMorgan maintaining its Underweight rating. Both brokerages highlighted the importance of bank funding for the company's network expansion and subscriber retention, while concerns around spectrum and AGR liabilities remain a key overhang.
Vodafone Idea Q2: Key Highlights (Cons, QoQ)
- Net loss at Rs 5,975 crore vs loss of Rs 3,754 crore.
- Revenue up 1.7% to Rs 11,884 crore vs Rs 11,689 crore.
- Ebitda down 1.1% to Rs 4,981 crore vs Rs 5,034 crore.
- Ebitda margin at 41.9% vs 43.1%.
- ARPU at Rs 198 vs Rs 195.
- One-time loss of Rs 462 crore vs. gain of Rs 1,611 crore.
What Are Brokerages Saying
JM Financial
- Maintained its Add rating with a target price of Rs 14.7.
- The brokerage said the results were in line with expectations, but the company's long-term viability depends on government relief for spectrum and AGR liabilities.
- Lenders' approval of Rs 250 billion in funding remains critical for network expansion and subscriber retention.
- The brokerage flagged rising spectrum repayments of Rs 70 billion, Rs 150 billion, and Rs 270 billion over FY27–29 as significant financial risks.
JPMorgan
- Maintained its Underweight rating with a target price of Rs 9.
- The brokerage said bank funding remains critical to sustaining network capex, market share, and subscriber retention.
- Excluding M2M connections, subscriber losses continue despite improving headline additions, while ARPU growth remains modest.
- JPMorgan expects minor consensus earnings downgrades and said fundraising progress remains the key near-term catalyst.
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