- Vodafone Idea shares rose over 3.5% in Monday's trading session
- Emkay upgraded Vodafone Idea's rating from sell to add
- Target price for Vodafone Idea was doubled from Rs 6 to Rs 12
Shares of Vodafone Idea have surged more than 3.5% on Monday's session after Emkay's positive note on the cash-strapped telecom operator. The stock is trading at Rs 11.52, accounting for gains of around 3.69%, compared to Friday's closing price of Rs 11.12.
In its latest note, Emkay has upgraded its outlook on Vodafone Idea from 'sell' to 'add'. The firm has also doubled its target price from Rs 6 to Rs 12, which, although it accounts for marginal upside, is quite big in terms of sentiment.
The brokerage firm noted that governemnt's moratorium on Vodafone Idea's AGR liabilities, with minimum annual payments until FY35, could provide a significant cash flow boost and act as a turnaround opportunity.
The relief also reduces the net present value of the burden by 60-80%, easing immediate survival pressure and the possibility of a further reduction on assessment of AGR dues.
Keeping that in mind, Vodafone Idea's access to funding for its 4G/5G expansion could receive a boost, although the firm has highlighted Vodafone Idea's inability to increase subscriber market share as a key risk.
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