Vodafone Idea shares: Motilal maintains 'neutral' on telecom stock, says this
Vodafone Idea shares rose 0.23 per cent to Rs 13.24 on BSE. The stock is down 22 per cent year-to-date. Motilal Oswal said cost savings resulted in 2 per cent Q4 Ebitda growth, sequentially.
- May 17, 2024,
- Updated May 17, 2024 10:30 AM IST
Vodafone Idea Ltd saw its shares rising marginally in early Friday trade, tracking the telecom operator's March quarter results. Motilal Oswal Securities said cost savings resulted in 2 per cent Q4 Ebitda growth, sequentially. It said revenue for Vodafone Idea declined 1 per cent quarter-on-quarter (QoQ) but was in line with the brokerage's estimate, led by 1 per cent QoQ subscriber loss at 26 lakh, partly offset by 1 per cent QoQ average revenue per user (ARPU) growth at Rs 146.
On Friday, the stock rose 0.23 per cent to Rs 13.24 on BSE. The stock is down 22 per cent year-to-date.
"Reported Ebitda was flat QoQ at Rs 43.30 billion (in line), while margin improved 10 bps QoQ to 40.9 per cent. Roaming charges increased 80 bps QoQ (percentage of sales), offset by all the other costs. Network and license costs declined 20bp QoQ each, and subscriber acquisition and other expenses declined 30bp QoQ each. Pre-Ind AS Ebitda grew 2 per cent QoQ to Rs 21.8 billion (in line) and margin improved 50 bps QoQ to 20.6 per cent," it said.
Motilal Oswal said the adjusted net loss remained flat sequentially and net debt declined Rs 7,200 crore to Rs 2.1 lakh crore.
"Spectrum and AGR debt accounted for 98 per cent of total debt. Market debt declined by Rs 2,000 crore to Rs 4,000 crore. OCD converted into equity of INR15b. Capex slightly increased to Rs 550 crore in 4Q and Rs 1,850 crore in FY24.
Ahead of Vodafone Idea's quarterly results, Kotak Institutional Equities said it was building in 15 per cent tariff hike in December 2025 against 10 per cent earlier, in addition to its expectation of 20 per cent tariff hike in June 2024 after the general elections.
"Our scenario analysis indicates a high risk-reward skew for Vi (bull-case FV: Rs 23; bear case Rs 7). However, long-term revival still hinges on government's relief measures and moderation in competitive intensity. We reinstate Vodafone Idea at SELL with Rs 10 fair value, as we await signs of market share stabilisation and more clarity on potential government relief measures/dilution before turning more constructive," Kotak said.
Vodafone Idea Ltd saw its shares rising marginally in early Friday trade, tracking the telecom operator's March quarter results. Motilal Oswal Securities said cost savings resulted in 2 per cent Q4 Ebitda growth, sequentially. It said revenue for Vodafone Idea declined 1 per cent quarter-on-quarter (QoQ) but was in line with the brokerage's estimate, led by 1 per cent QoQ subscriber loss at 26 lakh, partly offset by 1 per cent QoQ average revenue per user (ARPU) growth at Rs 146.
On Friday, the stock rose 0.23 per cent to Rs 13.24 on BSE. The stock is down 22 per cent year-to-date.
"Reported Ebitda was flat QoQ at Rs 43.30 billion (in line), while margin improved 10 bps QoQ to 40.9 per cent. Roaming charges increased 80 bps QoQ (percentage of sales), offset by all the other costs. Network and license costs declined 20bp QoQ each, and subscriber acquisition and other expenses declined 30bp QoQ each. Pre-Ind AS Ebitda grew 2 per cent QoQ to Rs 21.8 billion (in line) and margin improved 50 bps QoQ to 20.6 per cent," it said.
Motilal Oswal said the adjusted net loss remained flat sequentially and net debt declined Rs 7,200 crore to Rs 2.1 lakh crore.
"Spectrum and AGR debt accounted for 98 per cent of total debt. Market debt declined by Rs 2,000 crore to Rs 4,000 crore. OCD converted into equity of INR15b. Capex slightly increased to Rs 550 crore in 4Q and Rs 1,850 crore in FY24.
Ahead of Vodafone Idea's quarterly results, Kotak Institutional Equities said it was building in 15 per cent tariff hike in December 2025 against 10 per cent earlier, in addition to its expectation of 20 per cent tariff hike in June 2024 after the general elections.
"Our scenario analysis indicates a high risk-reward skew for Vi (bull-case FV: Rs 23; bear case Rs 7). However, long-term revival still hinges on government's relief measures and moderation in competitive intensity. We reinstate Vodafone Idea at SELL with Rs 10 fair value, as we await signs of market share stabilisation and more clarity on potential government relief measures/dilution before turning more constructive," Kotak said.