Vodafone Idea shares zoomed 26% today; here's what analysts say

Vodafone Idea Ltd shares climbed 25.84 per cent to hit a high of Rs 8.57 on Monday. At this price, the stock has recovered 29.85 per cent from its one-year low of Rs 6.60, seen on November 22 last year.

Today's sharp uptick came after the company said it would issue fresh equity shares worth Rs 36,950 crore, raising the government's stake in the struggling telco to 48.99 per cent. The move follows the Centre's 2021 telecom relief package and comes just weeks after CEO Akshaya Moondra's direct appeal to the Department of Telecommunications (DoT) for urgent equity conversion approvals. The new equity infusion is expected to ease pressure from mounting dues and regulatory payouts.

A few analysts suggested that the government's equity infusion is a positive for Voda Idea. "The stock is suitable only for high-risk appetite investors. We need to see improvement in the business parameters of the company. The recent announcement of the government converting dues into equity is a positive development in the medium- to short-term. But, one needs to check for strengthening of the key business indicators and ARPU (average revenue per user). Before taking any serious investment decision, a person needs to see how the company is going to increase its subscriber base and ARPUs," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.

Technically, the stock could move up to Rs 10.50 in the near term. "We can see an upside move towards Rs 8.50-10.50 levels. If you have a positive in the counter then hold it. On the downside, support would be placed at Rs 6.50," said Kkunal V Parar, Vice-President of Technical Research and Algo at Choice Broking. 

On the earnings front, the operator's consolidated net loss reduced to Rs 6,609.3 crore in the December 2024 quarter (Q3 FY25) from Rs 6,986.7 crore in the year-ago period. The telecom operator's revenue from operations climbed 4.16 per cent to Rs 11,117.3 crore in Q3 FY25 as against Rs 10,673.1 crore in the corresponding period last fiscal.

Voda Idea mentioned that the 4G subscriber base stood at 12.6 crore at the end of Q3 FY25, increasing from 12.56 crore as of Q3 FY24. "Customer ARPU (ex M2M) improved to Rs 173 vs Rs 166 in Q2 FY25, up 4.7 per cent on QoQ basis, driven by tariff hike and customer upgrades," it added.

VIL was formed in 2018 when Vodafone Group Plc merged its India business with Idea Cellular. Promoters held a 38.80 per cent stake in the operator as of January 9, 2025, a 1.48 per cent uptick from 37.32 per cent on December 31, 2024.