Vodafone Idea Q3 Results Preview: Losses to shrink QoQ, driven by tariffs and ARPU uptick

Embattled telco Vodafone Idea is likely to narrow its losses on a sequential basis while expanding revenues in the third quarter, driven by the residual impact of tariff hikes and an ARPU uptick.

When compared with the prior-year period, analysts are divided on whether the losses will widen or shrink. While Kotak Equities estimates the loss will decrease to Rs 6,697 crore, Motilal Oswal and Nuvama expect the negative bottom line to be higher.

Revenue from operations for the October-December 2024 period is expected to rise by 6% year-on-year (YoY), according to the average estimate of four brokerages.

Analysts are projecting the EoP subscriber base to decline by 2 million QoQ, while ARPU is expected to increase by 7.5% QoQ to Rs 168 per month, driven by tariff hikes and continuing improvements in the subscriber mix.

Here's what to expect from Vodafone Idea

Kotak Equities

We expect revenue growth of 5% QoQ driven by an ARPU uptick, led by tariff hikes, partially offset by the continued decline in subscribers. Reported EBITDA is likely to increase by 7-8% QoQ due to higher ARPUs.

Nuvama

We estimate revenue growth of 1.4% QoQ, driven by the residual impact of the tariff hike. EBITDA margins are expected to expand by 30 bps QoQ. Key monitorables include plans to increase network capacity, progress on the 5G rollout, and efforts to arrest subscriber decline.

Motilal Oswal

Expect 3.5% QoQ wireless revenue growth as the tariff hike benefit is partly offset by continued subscriber declines. Reported EBITDA is expected to grow 4% QoQ, with EBITDA margin expanding by 40 bps QoQ to 42%. Pre-IND AS 116 EBITDA is forecasted to rise to Rs 2,450 crore (vs. Rs 2,320 crore QoQ).

ARPU is likely to improve 6% QoQ to Rs 165, while the subscriber base is expected to decline by 4 million. Capex is expected to increase to Rs 2,800 crore (Rs 1,400 crore QoQ).

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)