Hold Vodafone Idea; target of Rs 15: ICICI Securities

hold

ICICI Securities research report on Vodafone Idea

Vodafone Idea’s (VIL) Q1FY25 print suggests that the company continues to underperform peers, pending acceleration in capex following the completion of fund raise. VIL plans to invest INR 500–550bn in network over the next three years with immediate focus on expanding coverage, and decongesting network. VIL believes it can start growing again with fair share of subscriber addition, as it plugs the 4G coverage gap and starts adding more data capacity through 4G/5G expansion. It expects 67–75% of tariff hike benefits to flow to revenue in the next few quarters. Key elements to watch: Capex acceleration and the resultant higher incremental market share.

Outlook

We keep our EBITDA estimates unchanged, but increase our target price of INR 15, as we raise FY27E EV/EBITDA multiple to 14x (from 13.5x). Maintain HOLD.

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