Vodafone Idea - Initiation Of The Capex Cycle; Subscriber Metrics Could Improve From Q4: Motilal Oswal

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. has experienced a continued rise in average revenue per user, led by the shift to 4G, higher data monetization, and an increase in minimum recharge vouchers. However, it has experienced an elevated subscriber churn during this period. Limited network investments have hindered the customer experience, resulting in subscriber churn. Over the next three years, the company expects to invest Rs 500-550 billion in expanding 4G coverage, launching 5G, and increasing capacity, all of which hold significant importance.  However, it still holds a debt of Rs 2 trillion with an annual installment of Rs 430 billion from FY26 onwards. This looks challenging against the Q1 FY25 annualized Ebitda (IND-AS 116) of Rs 80 billion. The significant amount of cash required to service debt leaves limited upside opportunities for equity holders, despite the high operating leverage opportunity from any source of ARPU improvement. We expect the conversion into equity of unpaid installments post-moratorium to start by FY26/27. We are factoring in a revenue/Ebitda CAGR of 11/31% over FY24-26E. Assuming 14 times enterprise value/Ebitda, coupled with net debt, we derive our target price of Rs 12. Restriction in the subscriber churn rate could remain a key catalyst for the stock. We reiterate our Neutral rating on the stock..Click on the attachment to read the full report:.Vodafone Idea Plans On Track Despite Set-Back On AGR Curative Petition: ICICI Securities.DISCLAIMERThis 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.

Vodafone Idea - Initiation Of The Capex Cycle; Subscriber Metrics Could Improve From Q4: Motilal Oswal

Restriction in the subscriber churn rate could remain a key catalyst for the stock, says the brokerage.

NDTV Profit

NDTV Profit

Follow Us

DOWNLOAD THE APP