Vodafone Idea Q4 Review: Analysts Say Fundraising Critical For Revival
A large and expedited fundraising is critical for Vodafone Idea Ltd. to prevent market erosion, network investments, and 5G rollout, analysts said, as they remained cautious on the carrier amid its persistent loss of subscribers.
That, even as prepaid tariff hikes led to 7.5% sequential rise in its average revenue per user to Rs 124 in the quarter ended March.
Vodafone Idea Q4 FY22 (Consolidated, QoQ)
Revenue up 5.37% at Rs 10,239.5 crore.
Ebitda up 38.32% at Rs 4,649 crore.
Ebitda margin at 45.4% against 39.28%.
Net loss narrowed to Rs 6,563.1 crore from Rs 7,231 crore.
Shares of Vodafone Idea rose as much as 4% in early trade on Wednesday. The stock, however, pared all gains to close the day with 0.57% loss. Of the 21 analysts tracking Vodafone Idea, six suggest a 'hold' and 15 recommend a 'sell', according to Bloomberg data. The average of the 12-month target price compiled by Bloomberg implies a 9.8% downside.
Here's what brokerages have to say about Vodafone Idea's Q4 FY22 results.
Maintains 'reduce' with a target price at Rs 8 apiece, an implied downside of 8%.
Tariff hikes led to revenue growth in Q4, while ARPU was marginally lower than our estimate.
The company's subscriber base continues to decline, while 4G subscriber base inched up by 1.1 million in the quarter.
Total data traffic remained flat, while voice traffic declined by 3% QoQ.
Promoter fund infusion, while positive for sentiment, is not enough for the company's revival.
Large and expedited fundraise remains critical for the company to prevent market share erosion.
Without significant fundraising, the company's network investments and 5G rollout would remain constrained, at least in the near term.
Maintains Bharati Airtel as the preferred pick among listed Indian telecom companies.
Maintains 'neutral', with a target price of Rs 10 apiece.
Recent tariff hike led to revenue growth.
The company's subscriber loss continued in Q4, while ARPU rose 7.8% QoQ.
Expects Vodafone Idea's network investment initiatives to deliver significant capacity uplift.
Maintains 'reduce' with a target price of Rs 11 apiece.
The company's revenue in Q4 was in line, while Ebitda margin beat estimates.
Increase in ARPU due to tariff hike led to the improved performance in Q4.
The company still needs capital infusion to catch up with peers in terms of 4G coverage/capacity.