I-Sec maintains Hold on Vodafone Idea, lowers target price to Rs 7

ICICI Securities has maintained a Hold call on Vodafone Idea with a revised target price of Rs 7 (Earlier Rs 8). The current market price of Vodafone Idea is Rs 6.78. Vodafone Idea Ltd., incorporated in 1995, is a Mid Cap company with a market cap of Rs 73348.23 crore, operating in Telecommunications sector.

Vodafone Idea's key products/revenue segments include Telecommunication Services, Other Operating Revenue and Traded Goods for the year ending 31-Mar-2024.



Financials
For the quarter ended 31-03-2025, the company has reported a Consolidated Total Income of Rs 11228.30 crore, down -1.22 % from last quarter Total Income of Rs 11366.80 crore and up 5.54% from last year same quarter Total Income of Rs 10639.30 crore. The company has reported net profit after tax of Rs -7168.10 crore in the latest quarter.

The company's top management includes Mr.Ravinder Takkar, Mr.Krishnan Ramachandran, Ms.Neena Gupta, Mr.Ashwani Windlass, Mr.Arun Adhikari, Mr.Anjani Agrawal, Mr.Kumar Mangalam Birla, Mr.Sateesh Kamath, Mr.Sushil Agarwal, Mr.Sunil Sood, Mr.Himanshu Kapania, Mr.Suresh Vaswani. The company has S R Batliboi & Associates LLP as its auditors. As on 31-03-2025, the company has a total of 7,139 crore shares outstanding.

Investment Rationale
Vodafone Idea's (VIL) Q4FY25 ARPU rose 0.6% QoQ (Bharti down 0.1%, RJio +1.4%), on expected lines. However, VIL lost higher-than-expected subs, and data subs dipped marginally by 0.1mn despite initial 4G network expansion. However, Voda Idea has started accruing the benefits of network rollout with strong penetration of 5G subs and improving customer engagement (data usage), which remains critical for revenue growth.

Government's conversion of debt of Rs 370 billion into equity provides immediate relief and also helps to increase debt funding discussion intensity with banks, which is key for network expansion. ICICI Securities cut its FY26E/FY27E EBITDA by 1% each and reduce the target price to Rs 7 (from Rs 8), based on an FY27E EV/EBITDA multiple of 15x (unchanged). The brokerage maintains HOLD.

Promoter/FII Holdings
Promoters held 38.8 per cent stake in the company as of 31-Mar-2025, while FIIs owned 10.1 per cent, DIIs 4.9 per cent.