Vodafone Idea shares at ₹6 or ₹15? Telco stock down 57% from peak; Check varying price targets

Shares of Vodafone Idea Ltd. opened lower on Wednesday, February 12, and fell as much as 7% as selling pressure emerged soon after. The telecom service provider declined 6.24% to hit the day’s low of ₹8.25. The stock has plunged in four of the last five trading sessions.

Out of the 22 analysts that have coverage on Vodafone Idea, 12 have a ‘Sell’ rating on the stock, six recommend ‘Hold,’ and four have a ‘Buy’ rating.

Goldman Sachs has the lowest target on Vodafone Idea at ₹2.4, while Ambit Capital has the highest at ₹15.Global brokerage firm UBS has a ‘Buy’ rating on Vodafone Idea, with a price target of ₹13, citing a broadly in-line December quarter.

The company’s revenues grew 1.7% quarter-on-quarter (+4.2% year-on-year), 1% below UBS estimates, with ARPU increasing 4.5% QoQ to ₹163 as against UBS estimate of ₹164.

EBITDA rose 3.6% QoQ (+8.3% YoY), 0.5% below estimates, with the EBITDA margin improving to 42.4%, up 77 bps QoQ.

The net loss of ₹6,610 crore was slightly worse than the estimated ₹6,330 crore due to higher depreciation & amortisation (D&A) and lower interest income.

UBS said that it will monitor Vodafone Idea’s capex plans, 5G coverage, and any potential AGR relief measures.On the flip side, CLSA has an ‘Underperform’ rating on Vodafone Idea, with a price target of ₹6 per share.

The third quarter revenue increased 2% QoQ and 4% YoY to ₹11,100 crore, below estimates. EBITDA rose 4% QoQ and 8% YoY to ₹4,700 crore, in-line with expectations.

Led by tariff hikes, ARPU grew 4% QoQ to ₹163, though it lags Bharti Airtel by 25%. However, Vodafone Idea’s subscriber loss continued, with a decline of 5 million QoQ and 15.4 million YoY, bringing the total to 200 million.

Due to higher-than-expected subscriber losses, CLSA has slashed its FY25-27 revenue and EBITDA estimates by 2%-5%.

CLSA is also awaiting Vodafone Idea’s debt fundraising plans.

Macquarie has a ‘Neutral’ rating on the stock, with a price target of ₹7.

Macquarie in its note said that Vodafone Idea’s December quarter results indicate continued market share erosion. While ARPU growth is in line with expectations, the ongoing decline in subscribers underscores the company’s fundamental challenges, with no quick fix in sight.

Shares of Vodafone Idea are trading 6.58% lower on Wednesday at ₹8.24. The stock is now down 25% from its FPO price of ₹11 and has more corrected nearly 60% from its 2024 peak of ₹19.18.