Vodafone Idea share price target raised: JM's Q3 preview for Bharti, VI, Jio

Ahead of Q3 earnings, JM Financial in a telecom preview note said it maintained its 'Add' rating on Vodafone Idea Ltd (VI) with a revised target of Rs 12.50 apiece against Rs 11.50 earlier. The brokerage retained its 'Buy' rating on Bharti Airtel Ltd with an unchanged target price of Rs 2,460, and also on Bharti Hexacom Ltd with an unchanged target of Rs 2,195. 

For the December quarter, Vodafone Idea is seen reporting largely flat revenue, reported Ebitda, and cash Ebitda sequentially, as net subscriber losses of around 35 lakh are expected to offset ARPU growth of 1.1 per cent QoQ to Rs 169, despite mobile broadband additions of about 5 lakh. Net loss is seen at Rs 6,986 crore.

"Its ARPU is likely to grow 1.1 per cent QoQ to Rs 169 (vs Rs 167 in 2QFY26) due to upgrades and improved subs mix. Hence, we expect its revenue to be flattish QoQ at Rs 11,200 crore, reported Ebitda to be flat QoQ at
Rs 4,700 crore and Pre-IND AS Ebitda (or cash Ebitda) to be marginally higher QoQ at Rs 2,260 crore in Q3FY26," VI said.

Bharti Airtel is expected to report 1.7 per cent quarter-on-quarter (QoQ) growth in India wireless revenue and 2.1 per cent growth in wireless Ebitda, led by strong mobile broadband additions of around 54 lakh, overall wireless subscriber additions of 33 lakh, and a 1 per cent QoQ rise in average revenue per user (ARPU) at Rs 259.

Similarly, Bharti Hexacom is expected to report 1.8 per cent QoQ growth in wireless Ebitda, supported by healthy mobile broadband additions of about 5 lakh and a 0.8 per cent QoQ improvement in ARPU to Rs 253.JM Financial maintained a positive view on Jio, citing its expectation that the industry’s wireless ARPU will grow at a 12 per cent CAGR over FY25-28. It noted that, given the consolidated industry structure, Jio will need to maintain a higher ARPU not only to justify its significant 5G capex, but also in light of its planned IPO in H1CY26, which aligns with the goal of sustaining a ‘3+1’ player market.

JM Financial is expecting telecom operators to see 0.4 per cent to 1 per cent QoQ growth in ARPU in Q3FY26, supported by upgrade-led improvement in subscriber mix.

Reliance Jio is expected to report 2.1 per cent revenue growth and 2.6 per cent Ebitda growth QoQ, driven by robust subscriber additions of about 84 lakh, including home broadband and machine-to-machine connections, compared with 83 lakh in Q2FY26. Jio’s ARPU is likely to improve 0.4 per cent QoQ to around Rs 212, aided by upgrades.

Indus Towers is expected to see healthy net tenancy additions, driven by Vodafone Idea’s network expansion and Bharti Airtel’s rural rollouts. As a result, adjusted Ebitda is likely to rise 1.4 per cent QoQ in Q3FY26, while reported Ebitda may decline 3 per cent QoQ due to a high base in Q2FY26 following the recovery of remaining Rs 200 crore past dues from Vodafone Idea, JM Financial said.

Separately, Tata Communications is expected to see revenue and Ebitda grow 1.6 per cent and 1.8 per cent QoQ, respectively, driven by its digital portfolio, though partly offset by continued weakness in core connectivity due to cable cuts and SAARC recoverability issues.

"Telcos could see 14-18 per cent Ebitda CAGR over FY25-28 as we expect 12 per cent ARPU CAGR led by: a) 6-7 per cent CAGR due to a tariff hike; and b) 5-6 per cent CAGR due to multiple premiumisation strategies; further, potential repair of industry tariff structure to ‘pay as you use’ model is likely to aid ARPU growth in the long term," JM said.

JM said the potential 5G monetisation and FWA rollout provides significant upside risk over the long term. Hence, Bharti, Jio and Bharti Hexaware's free cash flow could continue to grow driven by capex normalisation and structural growth in ARPU. 

"We reiterate BUY on TCOM (unchanged TP of INR 2,250) on expectation of improvement in profitability of the digital portfolio segment," it said.