Jobaaj Stories
Vodafone Idea, the embattled telecom giant, witnessed a nearly 4% rally in its shares during early trading on April 15, buoyed by Citi Research’s reaffirmed 'buy' rating. The global brokerage set a target price of Rs 12, signaling a potential upside of 67% from the stock’s previous close. By 11 am, Vodafone Idea shares were trading at Rs 7.32, up 2% on the NSE.
Citi’s optimism stems from the government’s recent conversion of Rs 3,700 crore in spectrum dues into equity, boosting its stake in Vodafone Idea from 22.6% to 48.99%. Despite the increased government holding, the company clarified that its promoters will retain operational control. Citi also maintained its positive outlook on Indus Towers, citing expectations of continued subscriber growth for both firms. However, it cautioned that Vodafone Idea remains a 'high-risk' investment.
Adding to the positive sentiment, ratings agency ICRA upgraded Vodafone Idea’s long-term fund facilities to BBB- from BB+, reflecting improved financial stability.
Challenges Persist Amid Subscriber Losses
Despite the upbeat outlook, analysts project a 1-2% sequential revenue drop for Vodafone Idea in the March quarter, driven by ongoing subscriber losses. While rivals like Bharti Airtel continue to post growth, Vodafone Idea is expected to lose 3 million subscribers in Q4, an improvement from 5.2 million in Q3, according to BoFA Securities. Analysts attribute this slowdown to enhanced network coverage, particularly in 4G, which is likely to support subscriber retention and gradual growth.
“With improving network rollout, Vodafone Idea is inching closer to stabilizing its subscriber base, but positive net additions remain elusive,” BoFA noted.
Investment Caution
Disclaimer: The views expressed by investment experts are their own and not those of Jobaaj News. We recommend consulting certified financial advisors before making investment decisions.
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