Hold Vodafone Idea; target of Rs 11: ICICI Securities

ICICI Securities recommended hold rating on Vodafone Idea with a target price of Rs 11 in its research report dated September 24, 2024.

Broker Research

September 24, 2024 / 11:38 IST

hold

26 Aug, 2025 12:21

Volume

Todays L/H

ICICI Securities research report on Vodafone Idea

Despite India’s Supreme Court rejecting the curative petition for AGR dues, VIL is hopeful towards a resolution of the arithmetical error in the AGR dues calculation; it has been engaging with the government on the subject. VIL said that its case has strong merit, and dialogue with the government is and has been encouraging. Also, VIL is factoring in INR 290bn of government debt – to be converted into equity at the end of the moratorium period, as per the reform package. VIL is nearing closure of debt funding of INR 250bn; another INR 100bn for non-fund facilities that should help boost capex. VIL also signed deals with major equipment suppliers for INR 300bn, for radios to be supplied over the next three years; it expects capex to kick start from Nov’24. VIL also envisages another tariff hike of 15–20% in 15 months.

Outlook

We have pushed our estimate on AGR relief of INR 350bn from FY25E to FY26E, and capex acceleration to FY26E. This has led to a change in our net profit estimate for the period of FY25–27E while EBITDA remains unchanged. Considering the risk of AGR resolution rising, we cut our EV/EBITDA multiple to 13x FY27E (from 14x); consequently, our target price stands reduced to INR 11 (from INR 15). Maintain HOLD.

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