Vodafone Idea shares surged 7% today; here's why

Shares of Vodafone Idea Ltd (VIL) surged 7 per cent in Tuesday's trade, resuming its recent uptrend. The stock was in focus as global brokerage Citi reportedly suggested a 'high-risk buy' recommendation on the telecom operator. Besides, investors were keenly waiting the SC's AGR hearing on September 26.  In its last hearing, the bench said there needs to be some finality to these proceedings.

Citi suggested a price target of Rs 10 on the stock, which hinted at a potential 12 per cent upside over Tuesday's intraday high of Rs 8.97 apiece. The stock managed to hold some gains as the second progressed. It was up 4.17 per cent at Rs 8.74 apiece.

The brokerage said the Supreme Court has admitted Vodafone Idea's latest AGR plea and with the government also expressing its support, CNBC TV1- reported. As per the report, Citi said chances of a potential relief for the company have increased.

JM Financial in a note earlier this month maintained 'Hold' on the VIL stock with an unchanged target price of Rs 9. Key monitorables that can pose upside risks to valuation include further relief from government dues either via partial waiver of AGR dues and/or allowing surrender of pre-2022 spectrum, conversion of more dues to equity and extension of moratorium.

Besides, the brokerage said multiple sharp tariff hikes that can result in VIL’s blended ARPU being significantly above the prevailing estimate of Rs 183 in FY26, Rs 207 in FY27 and Rs 229 FY28 against Rs 165 in Q1FY26. JM said another upside could come from VIL’s subscriber growth being significantly above JM's assumption of 1 per cent growth per annum.

"However, there could be downside risk to our estimates/valuation if VIL is not able to arrest its subscriber decline and/or tariff hikes are lower than expected," it said.