Vodafone Idea Q3 Results Preview: Losses to widen further; marginal revenue growth seen

Vodafone Idea is expected to report a weak December-quarter performance, with revenue growth remaining muted and losses widening as modest gains in ARPU continue to be offset by ongoing subscriber losses. An average of five brokerages expects revenue to rise by about 1% year-on-year in Q3, while losses are seen expanding to around Rs 6,700-7,000 crore.

Revenue steady, ARPU inches up

Brokerages broadly expect Vodafone Idea's revenue to remain largely flat on a sequential basis, with marginal improvement driven by a small increase in ARPU.


Kotak Equities expects revenue to rise about 0.6% quarter-on-quarter (QoQ), supported by better ARPU, but largely neutralised by continued subscriber churn. Motilal Oswal also expects flat sequential revenue, as the decline in the user base offsets pricing gains.

ARPU is expected to improve slightly during the quarter, helped by an ongoing 2G-to-4G migration. Kotak Equities models ARPU at around Rs 169 per month, up from Rs 167 in the September quarter. Motilal Oswal and Centrum Broking expect a similar trend, with ARPU rising about 1% QoQ to Rs 168-169. UBS is marginally more optimistic, estimating ARPU growth of around 1.4% QoQ, but still flags subscriber losses as a key drag.

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Subscriber losses continue

Subscriber churn remains the biggest challenge for the company. Kotak Equities expects Vodafone Idea’s end-of-period subscriber base to decline by about four million QoQ to around 192.7 million, a sharper fall compared with the previous quarter. Motilal Oswal estimates a decline of about 1.5 million users, while Centrum Broking expects subscriber losses of around 2 million, largely in the 2G segment.

UBS also expects continued subscriber erosion, noting that while ARPU improvements help revenue quality, they are insufficient to offset the impact of ongoing losses in the user base.

EBITDA shows modest improvement

On the operating front, brokerages expect a modest sequential improvement in EBITDA, driven by cost optimisation. Kotak Equities models a 1.7% QoQ rise in reported EBITDA, while Motilal Oswal expects a smaller 0.6% uptick, with EBITDA margins expanding about 15 basis points to around 42%. Centrum Broking sees a similar margin improvement of about 18 basis points to 42%.

UBS is relatively more constructive on EBITDA, estimating a 3.1% QoQ increase, taking EBITDA to around Rs 4,800 crore for Q3, supported by operating efficiencies despite weak topline growth.

Losses seen widening

Despite some improvement at the EBITDA level, net losses are expected to widen further due to high interest costs and limited revenue growth. JM Financial sees losses widening to about Rs 6,986 crore in Q3. Kotak Equities estimates a loss of around Rs 6,763 crore, while Motilal Oswal expects losses to widen to roughly Rs 6,700 crore.

Key monitorables

Management commentary on funding plans, capex outlook, and relief on adjusted gross revenue (AGR) dues will be closely watched. UBS notes that uncertainty around AGR appears to be easing, which could improve medium-term visibility. However, near-term pressures from subscriber losses and delayed tariff hikes remain key risks.

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