Vodafone Idea shares: Emkay doubles Vi target price, upgrades stock from 'Sell' rating
The domestic brokerage said the government has approved a major moratorium for Vi’s AGR liabilities, with minimal annual payments until FY35. It expects the development to provide significant cash flow relief and a turnaround opportunity for Vi.
- Feb 9, 2026,
- Updated Feb 9, 2026 8:46 AM IST
Emkay Global has upgraded Vodafone Idea Ltd (Vi) to 'Add' rating from 'Sell', doubling its target price on the telecom stock to Rs 12 from Rs 6 earlier.
The domestic brokerage said the government has approved a major moratorium for Vi’s AGR liabilities, with minimal annual payments until FY35. It expects the development to provide significant cash flow relief and a turnaround opportunity for Vi.
"The relief reduces the net present value (NPV) of the burden by 60–80 per cent, easing immediate survival pressure, along with the possibility of further reduction on reassessment of AGR dues," Emkay Global said.
Besides, Emkay Global said the move will enable Vodafone Idea to access bank funding for 4G and 5G expansion, helping the company arrest subscriber churn and market-share loss.
With the government freezing AGR dues, the NPV of the AGR dues has dropped to Rs 50,000 crore against Rs 87,000 crore earlier, with a further scope for reduction in liabilities in case of a favorable outcome of recalculation and reconciliation.
While the long-term sustainability of Vodafone Idea is no more a concern, Emkay said it will have to execute well to gain subscriber market share and migrate the subscriber base from 2G to 4G/5G.
"The stock trades at 12.5 times/11.5 times FY27/FY28 EV/Ebitda. While we maintain our target multiple at 12 times on Q3FY28E Ebitda, the reduction in the AGR debt and corresponding increase in Ebitda estimates leads to an increase in our TP to Rs 12 (from Rs 6). We upgrade the stock to ADD from Sell, considering the improved outlook for the company," it said.
"We raise the target to Rs 12 (from Rs 6). Key risks: Inability to i) increase subscriber market share; ii) significantly increase ARPU with tariff repair, and iii) upgrade the subscriber base from 2G to 4G/5G," it said.
Vi has earmarked Rs 45,000 crore of network capex over the next three years, targeting 4G expansion and 5G rollout across priority circles. Emkay said this will help VI increase its average revenue per user (ARPU) at a faster clip versus competition, considering it has a lower proportion of subscriber base on the 4G/5G network.
"Continued migration to data, rising usage, and tariff repair provide scope for ARPU-led Ebitda expansion, in our view, even without aggressive subscriber additions. Factoring in these changes, we raise our FY27/FY28 revenue by 5 per cent/4.9 per cent and Ebitda by 5.4 per cent/4.2 per cent," Emkay said.
Emkay Global has upgraded Vodafone Idea Ltd (Vi) to 'Add' rating from 'Sell', doubling its target price on the telecom stock to Rs 12 from Rs 6 earlier.
The domestic brokerage said the government has approved a major moratorium for Vi’s AGR liabilities, with minimal annual payments until FY35. It expects the development to provide significant cash flow relief and a turnaround opportunity for Vi.
"The relief reduces the net present value (NPV) of the burden by 60–80 per cent, easing immediate survival pressure, along with the possibility of further reduction on reassessment of AGR dues," Emkay Global said.
Besides, Emkay Global said the move will enable Vodafone Idea to access bank funding for 4G and 5G expansion, helping the company arrest subscriber churn and market-share loss.
With the government freezing AGR dues, the NPV of the AGR dues has dropped to Rs 50,000 crore against Rs 87,000 crore earlier, with a further scope for reduction in liabilities in case of a favorable outcome of recalculation and reconciliation.
While the long-term sustainability of Vodafone Idea is no more a concern, Emkay said it will have to execute well to gain subscriber market share and migrate the subscriber base from 2G to 4G/5G.
"The stock trades at 12.5 times/11.5 times FY27/FY28 EV/Ebitda. While we maintain our target multiple at 12 times on Q3FY28E Ebitda, the reduction in the AGR debt and corresponding increase in Ebitda estimates leads to an increase in our TP to Rs 12 (from Rs 6). We upgrade the stock to ADD from Sell, considering the improved outlook for the company," it said.
"We raise the target to Rs 12 (from Rs 6). Key risks: Inability to i) increase subscriber market share; ii) significantly increase ARPU with tariff repair, and iii) upgrade the subscriber base from 2G to 4G/5G," it said.
Vi has earmarked Rs 45,000 crore of network capex over the next three years, targeting 4G expansion and 5G rollout across priority circles. Emkay said this will help VI increase its average revenue per user (ARPU) at a faster clip versus competition, considering it has a lower proportion of subscriber base on the 4G/5G network.
"Continued migration to data, rising usage, and tariff repair provide scope for ARPU-led Ebitda expansion, in our view, even without aggressive subscriber additions. Factoring in these changes, we raise our FY27/FY28 revenue by 5 per cent/4.9 per cent and Ebitda by 5.4 per cent/4.2 per cent," Emkay said.