Neutral Vodafone Idea; target of Rs 11: Motilal Oswal

Neutral

Motilal Oswal's research report on Vodafone Idea

VIL reported 2% QoQ growth in EBITDA (pre Ind AS-116) in 2QFY24, led by 2% ARPU growth and a decrease in subscriber acquisition costs. Its subscriber base continued to decline, but at a slower pace of 1.6m in 2Q vs. average 4m loss in the last six quarters. Capex remained low as the management awaited the necessary fund raise. VIL continues to lose market share, partly accentuated by tariff hikes in the minimum recharge category. Its efforts for fundraise are at an advanced stage, with a confirmation of INR20b in financial support by one of the promoters.

Outlook

However, the liquidity situation continues to appear bleak, given that there is a scheduled debt repayment of INR72b as of Sep’24. EBITDA (pre IND-AS 116) stood at INR88b in FY24. We reiterate our Neutral rating on the stock.

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Vodafone Idea - 31 - 10-2023 - moti