- Vodafone Idea shares rose for a seventh straight session to a 10-month high
- Q4 revenue was Rs 11,332 crore with EBITDA margin improving to 43.1%
- Net profit of Rs 51,970 crore included Rs 58,116 crore exceptional AGR gain
Vodafone Idea shares rose for a seventh straight trading session on Wednesday, taking the stock to its highest level since September 2024.
The stock climbed as much as 1.1% to Rs 14.29 during the session and has gained 10% over the last seven trading days. The rally marks its longest gaining streak since July 2025.
The recent rise in the telecom stock followed its Q4 earnings, which came in line with expectations, along with a ratings upgrade for proposed bank facilities. Crisil Ratings assigned its 'Crisil A-/Stable' rating to proposed bank loan facilities worth Rs 35,000 crore, improving sentiment around the stock.
The Relative Strength Index stood at 85, indicating the stock may be overbought.
Profit Boost
Vodafone Idea reported Q4 revenue of Rs 11,332 crore compared with Rs 11,323 crore in the previous quarter. Ebitda rose 1.5% to Rs 4,889 crore from Rs 4,817 crore, while margin improved to 43.1% from 42.5%.
The company posted a net profit of Rs 51,970 crore against a net loss of Rs 5,286 crore in the previous quarter. The profit was driven by an exceptional gain of Rs 58,116 crore linked to AGR adjustments, which reduced dues and extended the payment period.
Excluding exceptional items, the company would have reported a loss of Rs 5,515 crore. The gain was a book entry and not a cash gain.
The company also announced a preferential allotment to the Aditya Birla Group. Vodafone Idea will issue 430 crore shares at Rs 11 apiece, amounting to Rs 4,730 crore. The group's holding will increase from 9.6% to 13.6% after the transaction.
"Aditya Birla Group sees VIL as a strategically important entity," Crisil said.
The ratings agency said the recent appointment of Kumar Mangalam Birla as chairman highlighted the group's management control over the telecom operator.
Crisil also said the group expects long-term economic benefits from Vodafone Idea as operations improve and cash flows strengthen.
Subscriber decline remained negligible on a quarter-on-quarter basis, while average revenue per user rose 1.2%, indicating better monetisation. The company also kept expense growth under control despite network expansion, helping more revenue flow to Ebitda.
Churn rates declined as Vodafone Idea focused on higher-quality subscribers.
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Street Cautious
Some concerns remain around the company's fundraising and subscriber trends.
The preferential allotment is being done at a 15% discount to the current market price, while the Street was expecting an external investor with stronger financial backing. Analysts have also flagged that continued equity dilution could limit stock returns.
Capital expenditure remained lower at Rs 2,300 crore. Subscriber numbers were also supported partly by higher machine-to-machine additions. Excluding those additions, prepaid subscriber decline would have been 1.4 million.
Among 21 analysts tracked by Bloomberg, 10 have a 'Sell' rating on the stock, eight recommend 'Hold' and three have a 'Buy' rating. The consensus price target tracked by Bloomberg stands at Rs 11.27, implying a potential downside of around 20% from current levels.
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