Fri Sep 20 07:46:27 UTC 2024: ## Vodafone Idea Shares Plunge After Supreme Court Ruling on AGR Dues
**Mumbai, India** – Following a 20% crash in Vodafone Idea Ltd (VIL) shares on the Dalal Street, several brokerages have released their updated target prices for the struggling telecom company. The sharp decline in share value comes after the Supreme Court dismissed VIL’s petition to re-compute its Adjusted Gross Revenue (AGR) dues, dealing a significant blow to the company.
The Supreme Court’s unfavorable verdict puts an end to the hope of a liabilities waiver, one of the three crucial factors previously identified by brokerages for VIL’s recovery. The other two, capital infusion and tariff hikes, have already been met.
Despite the setback, some analysts believe the worst is now behind VIL. Nuvama Institutional Equities has adjusted its target price to reflect the full liability of AGR dues, maintaining a “HOLD” rating with a revised target price of Rs 11.50. Nomura India, on the other hand, has upgraded its rating to “BUY” with an unchanged target price of Rs 15, citing the stock’s recent decline as a buying opportunity.
Nomura believes that VIL’s future looks brighter with the AGR uncertainty resolved. While acknowledging the substantial debt burden, the brokerage expects the company to gradually recover and benefit from the robust Indian telecom industry outlook, fueled by recent tariff hikes and 5G monetization opportunities.
UBS has also weighed in, suggesting a fair value for VIL between Rs 12 and Rs 24, indicating a slight undervaluation of the stock. The brokerage acknowledges the potential for equity conversion or deferred payments as possible avenues for VIL to manage its debt burden.
Overall, despite the Supreme Court ruling, brokerages remain optimistic about VIL’s future. The focus now shifts to the company’s operational performance, including subscriber retention, the impact of tariff hikes, and investment in infrastructure.
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