Vodafone Idea - Q1FY21 Result Update - ICICI Securities

Vodafone Idea's (VIL) Q1FY21 performance was a reflection of its continued weakness in terms of sub-par subscriber quality, lag in 4G network, balance sheet stress. Revenues at Rs. 10,659 crore fell 9.3% QoQ, with ARPU at Rs. 114 (down ~5.8% QoQ, largely due to weak underlying sub base, Covid-19 led validity extension), coupled with net loss of 11.1 million (mn) customers. EBITDA (excluding Ind-AS 116 impact), adjusted for one-offs was at Rs. 1540 crore, down ~10% QoQ and adjusted margin of 14.4%, down 20 bps QoQ.

Valuation & Outlook

VIL is the weakest private telco. The company continues to face losses (now slipping into negative networth) and risk of eventual bankruptcy. While AGR extension could be a short term breather, its survival hinging on decent sized capital infusion and industry reforms such as floor tariff and other reliefs. We reinstate our ratings and assign SELL with DCF based target price of Rs. 6/share. Any plans of fund infusion (~Rs. 10000+ crore) along with sharp tariff hike/floor tariff decision will be a key risk to our call.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_VodafoneIdea_Q1FY21.pdf

Shares of Vodafone Idea Ltd was last trading in BSE at Rs.8.71 as compared to the previous close of Rs. 9.09. The total number of shares traded during the day was 27436768 in over 122603 trades.

The stock hit an intraday high of Rs. 9 and intraday low of 8.65. The net turnover during the day was Rs. 240406050.

Source : Equity Bulls

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