Vodafone Idea Ltd (VIL) shares climbed 3 per cent in Tuesday's trade, reaching Rs 13.30 apiece, following the telecom operator's June quarter results. The company reported a narrowing of losses and marginally surpassed revenue and Ebitda estimates, though the results presented no major surprises.
The telecom operator is scheduled to hold a conference call with analysts at 2:30 pm IST to discuss the Q1 performance further. Ahead of this call, several stock brokerages have maintained largely 'Neutral' ratings and unchanged target prices for VIL shares.
Q1 Performance Highlights
For the June quarter, Vodafone Idea announced its net loss narrowed significantly to Rs 3,754 crore, down from Rs 6,608 crore in the year-ago quarter. Consolidated Ebitda saw a 9.1 per cent year-on-year increase, reaching Rs 5,034 crore. This operational improvement was attributed to sequential subscriber additions and a continued migration of customers to high-speed broadband services.
More than 67 per cent of Vodafone Idea's total subscriber base now utilizes 4G/5G services. The average revenue per user (ARPU), excluding M2M, grew by 10.2 per cent year-on-year to Rs 195, up from Rs 177 in Q1FY26. Additionally, average data usage per 4G/5G subscriber increased to 21.7 GB per month, contributing to a total daily data traffic of 88.4 Petabytes across the network.
The quarter also marked a significant milestone with VIL reporting a net subscriber addition of 3 lakh, bringing its total subscriber base to 19.31 crore. This represents the first quarter of subscriber growth for the company since its merger.
Analyst Ratings and Target Prices
Brokerages largely maintained cautious outlooks on Vodafone Idea shares:
- UBS set the highest target price at Rs 15, largely attracting 'Neutral' ratings.
- CLSA advised a 'Hold' rating with a target of Rs 13 per share.
- Nomura maintained a 'Neutral' rating, setting a target price of Rs 12.60. They noted that Q1 revenue was 1.6 per cent ahead of their estimates, and Ebitda beat by 0.5 per cent. Nomura emphasized that successful debt-capital raises, industry tariff hikes, accelerated subscriber additions, and strategic equity investments remain crucial catalysts for VIL.
- Axis Capital retained its 'Reduce' call with a target of Rs 12.25.
- JPMorgan kept an 'underweight' rating with a target of Rs 9, highlighting that bank funding continues to be a critical factor for the company.
The quarter also included exceptional gains for VIL, primarily stemming from the remeasurement of its stake in Vodafone Inc as part of a settlement with promoters.