Vodafone Idea: A Telco in Flux—Can It Right the Ship?
Q1 FY25: A Mixed Bag
Vodafone Idea posted a net loss of ₹6,608 crore for the quarter ended June 30, 2025—worse than ₹6,432 crore a year ago—mainly due to increasing finance costs and government levies. Still, revenue grew 4.9–5% YoY with 15% rise in ARPU to ₹177.(The Times of India, The Economic Times, Reuters)
Unexpected Market Reaction
Surprisingly the stock rose despite the widening loss:
- August 18, 2025 → Up 8.6% to ₹6.68.(The Economic Times)
- August 19, 2025 → Up 2.17% to ₹6.60 as management announced Vi will use non-bank funding and internal cash flows for capex from September.(The Economic Times)
Leadership in Transition
On August 14, Vi appointed COO Abhijit Kishore as its new CEO from August 19, 2025—continuity of strategy with new leadership.(Reuters, The Economic Times)
Strategic Crossroads & Analyst View
Non-bank Funding and Self-Reliance
With FPO proceeds over by September, Vi will have to use internal cash flows and alternative financing to fund network upgrades. Bank loans are not an option due to AGR liabilities.(The Economic Times)
ARPU Growth vs. Weakness
Though ARPU growth is good, Vi is still behind Airtel (~₹250) and Jio (~₹209). Subscriber base shrinkage and high debt is the systemic drag.(Reuters)
Bull Case: Can Profits Return?
Value Research says if 2G subscribers are converted to 4G and ARPU is hiked substantially, Vi can be profitable. But with ₹25,000 crore interest obligation, profitability is far away without debt relief.(Value Research Online)
Valuation: How Far Off Are We?
- StockGro estimates intrinsic value at ₹6.2 per share, down from current levels.(StockGro)* Alpha Spread’s relative valuation model puts Vi at ₹40.24 in the base case—82% undervalued at ₹7-ish levels.(www.alphaspread.com)
Conclusion: Navigating the Storm
Vodafone Idea is on thin ice: Operating losses continue, subscriber base is shrinking and financial stress from debt and AGR dues is mounting.
But risks are huge: Without government intervention, quick fundraising and competitive capex, Vi will be stuck in a reactive mode.
For Vi investors:
- This is a high risk, cyclical play not a stable investment.
- Watch out for: capex announcements, funding breakthroughs and AGR relief developments.
- A bullish case would require a structural recovery—not just tactical improvements.BlueStone Jewellery IPO GMP, Grey Market Premium Today
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