Vodafone Idea share price surged 13.26 per cent intraday, reaching the day’s high of ₹15.05 on the NSE after CARE Ratings’ upgraded the company’s Long Term Bank Facilities from B+ to BB+, maintaining a stable outlook. Additionally, the Short Term Bank Facilities were upgraded from A4 to A4+.
The company announced after the market hours on Tuesday. On June 4, the stock had settled at ₹13.20, plummeting nearly 17 per cent on the day of the vote count. This drop was in reaction to the election results, which indicated that the Bharatiya Janata Party (BJP) had fallen short of securing a majority on its own. Despite this, the BJP is expected to form a government with the support of its alliance partners.
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While the brokerage firm has maintained its ‘sell’ rating on the stock, estimating it to drop to ₹8, it has also outlined a bullish scenario with a target of ₹200. This optimistic projection assumes significant tariff hikes driving ARPU to ₹200 by FY26 and ₹300 by FY30. Additionally, the company would need to retain its current subscriber base of 213 million, compared to the 188 million assumed in the base case by FY30.
Moreover, JM stated that the extension of the moratorium beyond FY26/FY27 and/or partial equity conversion of GoI dues, depending on VIL’s evolving liquidity position, could also be a factor to consider.
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Vodafone Idea’s net loss for the fiscal fourth quarter of FY24 widened to ₹7,675 crore, up from ₹6,986 crore in the previous quarter, which had benefited from an exceptional gain. The financially troubled telco continued to struggle with high debt and customer losses.
However, operationally, the joint venture between the UK’s Vodafone Group Plc and India’s Aditya Birla Group saw improvement, reporting its highest-ever quarterly earnings before interest, tax, depreciation, and amortization (EBITDA) since the 2018 merger, amounting to ₹2,180 crore.
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Published: 05 Jun 2024, 04:44 PM IST