Why Vodafone Idea, Indus Towers shares rallied up to 10% today; stock price targets
Vodafone Idea shares hit its 10 per cent upper circuit limit at Rs 10.03 apiece. IIFL Securities sees no risk to future tariff hikes since the relief measures only partly address the challenge of making VIL a competitive third player.
- Jan 20, 2025,
- Updated Jan 20, 2025 9:22 AM IST
Shares of Vodafone Idea Ltd Bharti Airtel Ltd and Indus Towers Ltd climbed up to 10 per cent in Monday's trade, following reports the government is working on a potential partial waiver of AGR dues, which would bring down the liabilities of Bharti Airtel Ltd and Vodafone Idea Ltd (VIL) by Rs 38,000 crore and Rs 52,000 crore, respectively. Reports suggest the relief could be announced as soon as February 1, in Union Budget 2025.
The Vodafone Idea stock hit its 10 per cent upper circuit limit at Rs 10.03 apiece. "In our view, we do not see any risk to future tariff hikes since the relief measures only partly address the challenge of making VIL a competitive third player. A significant increase in revenue is a key requirement to ensure VIL's financial health. We stick to our view that there is likely to be another round of 15 per cent tariff hikes in late 2025. However, we will not be surprised if entry level plans see no tariff hikes, with the increase restricted to other plans," it said. The brokerage suggested a target price of Rs 10 on VIL.
Indus Towers shares climbed 7.43 per cent at Rs 390. Indus Towers should benefit from likely uninterrupted network rollout by Vodafone Idea, said IIFL Securities.
"With a potential AGR relief significantly raising the chances of Vi’s debt raise, Indus should benefit from Vi’s uninterrupted rollout. Indus will gain from Vi’s 4G coverage expansion in particular. Vi’s CEO has indicated that the telco intends to increase its 4G location count from the current 172k to 215-220k. Our channel checks suggest that Vi has placed orders for the same," IIFL Securities said.
It said Bharti Airtel and JIO is likely to raise their 4G location count and said VIL will have to take its count to 2,40,000-2,50,000 by end-FY27. Its target price of Rs 444 on Indus already factors this in.
Shares of Vodafone Idea Ltd Bharti Airtel Ltd and Indus Towers Ltd climbed up to 10 per cent in Monday's trade, following reports the government is working on a potential partial waiver of AGR dues, which would bring down the liabilities of Bharti Airtel Ltd and Vodafone Idea Ltd (VIL) by Rs 38,000 crore and Rs 52,000 crore, respectively. Reports suggest the relief could be announced as soon as February 1, in Union Budget 2025.
The Vodafone Idea stock hit its 10 per cent upper circuit limit at Rs 10.03 apiece. "In our view, we do not see any risk to future tariff hikes since the relief measures only partly address the challenge of making VIL a competitive third player. A significant increase in revenue is a key requirement to ensure VIL's financial health. We stick to our view that there is likely to be another round of 15 per cent tariff hikes in late 2025. However, we will not be surprised if entry level plans see no tariff hikes, with the increase restricted to other plans," it said. The brokerage suggested a target price of Rs 10 on VIL.
Indus Towers shares climbed 7.43 per cent at Rs 390. Indus Towers should benefit from likely uninterrupted network rollout by Vodafone Idea, said IIFL Securities.
"With a potential AGR relief significantly raising the chances of Vi’s debt raise, Indus should benefit from Vi’s uninterrupted rollout. Indus will gain from Vi’s 4G coverage expansion in particular. Vi’s CEO has indicated that the telco intends to increase its 4G location count from the current 172k to 215-220k. Our channel checks suggest that Vi has placed orders for the same," IIFL Securities said.
It said Bharti Airtel and JIO is likely to raise their 4G location count and said VIL will have to take its count to 2,40,000-2,50,000 by end-FY27. Its target price of Rs 444 on Indus already factors this in.