Vodafone Idea Surges on Profitability Turnaround

Vodafone Idea has reported its first quarterly profit in six years, signaling a potential turnaround. The company's AGR dues have been reduced by 27% to Rs 64,046 crore, with all repayments deferred until fiscal years 2036-2041. This financial restructuring has positively impacted its stock, which saw a 43% surge in the past month.

Despite these improvements, brokerage firms hold differing views on Vodafone Idea's future. Nomura downgraded the stock to 'Neutral' due to limited upside potential, though it raised the target price. The firm still favors Bharti Airtel among telecom stocks. Nomura acknowledged factors like successful capital raises, potential industry tariff hikes, subscriber loss reversal, and strategic investments as positives.

Motilal Oswal Financial Services also increased its target price but indicated a potential downside. The management's ambitious growth targets are considered challenging, requiring sustained tariff hikes, stable subscriber trends, and rational competition. Nuvama Institutional Equities maintained a 'Hold' rating while raising its target price, noting improved EBITDA margins and a stabilized subscriber base, but stressed that more positive developments are needed.

The company reported Q4FY26 revenue of Rs 113.3 billion, with a slight quarter-on-quarter increase. Its subscriber base remained stable at 192.8 million, and average revenue per user (ARPU) grew by 1.2% to Rs 174. Over the past year, Vodafone Idea's stock has delivered substantial returns of 101%.