Fri Sep 20 07:33:49 UTC 2024: ## Vodafone Idea Shares Rebound After AGR Verdict, But Analyst Opinions Diverge
**Mumbai, India** – Shares of Vodafone Idea (Vi) rebounded on Friday, closing 1.35% higher on the NSE and flat on the BSE, after hitting a 52-week low of ₹9.79 on Thursday. This follows a sharp decline of nearly 20% on Thursday, triggered by the Supreme Court’s dismissal of telecom companies’ pleas for a correction of alleged errors in the Adjusted Gross Revenue (AGR) calculation.
The Supreme Court’s verdict has sparked varied reactions from analysts. Nuvama Institutional Equities considers it a “big setback” for Vi, potentially hindering the company’s planned ₹25,000 crore debt raise, following its recent ₹20,000 crore FPO. The brokerage downgraded its target price from ₹16.5 to ₹11.5 while maintaining a “hold” rating.
Conversely, Nomura upgraded its rating to “buy” at a target price of ₹15, citing the removal of the AGR overhang and a strong industry outlook. They are optimistic about government support to ease the company’s funding gap.
Domestic brokerage JM Financial maintained a “sell” call, emphasizing the company’s long-term sustainability relies heavily on government support in the form of moratorium extension, partial equity conversion of dues, and significant tariff hikes.
Global brokerage Goldman Sachs remains bearish, retaining its “sell” call with a target price of ₹2.5, while Macquarie highlighted risks of market share erosion and equity dilution.
Citi and UBS maintain their “buy” calls on Vi at target prices of ₹17 and ₹12-24 respectively.
The telecom giant faces several challenges, with analysts pointing to a declining subscriber base, affecting ARPU growth and cash flows. Nuvama notes that Vi appears to be losing market share to BSNL despite recent tariff hikes.
JM Financial highlights the need for a significant increase in ARPU to ₹370 by FY27 to meet the annual payment obligation of ₹43,000 crore, assuming 70% incremental EBITDA margin and 210 million subscribers.
Trai data shows Vodafone Idea’s wireless subscriber base declined by 14.13 lakh users in July 2024, following a loss of 8.60 lakh users in June.
Technical analysts observe a weakening stock texture, with a potential support band between ₹7 to ₹6 and resistance within the range of ₹12 to ₹12.5.
Despite the rebound, the future of Vodafone Idea remains uncertain, heavily dependent on government support and the company’s ability to address its financial challenges.
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