Vodafone Idea Share: Detailed Analysis

Vodafone Idea Share: After the Supreme Court denied relief on its AGR dues, Vodafone Idea’s share price saw a sharp sell-off last week, hitting a new 52-week low of ₹9.79. However, the stock rebounded and ended the week in green, closing at ₹10.52, up 7.50%.

According to global brokerage Nuvama, the market didn’t expect any major boost in Vodafone Idea share price due to the Supreme Court’s decision. But since the company’s fundamentals remain stable, a strong recovery could be possible.

Nuvama also emphasized that Vodafone Idea has backing from the Government of India (GoI), which can help close its funding gap. Though there are a lot of positive Factors behind its future recovery. But there remain a few hurdles that you need to keep in mind if you’re thinking of investing in it.

Citi has also given a Buy Call With Huge Target and they are also expecting a good recovery from this level.

Key Triggers To look for in Vodafone

The Supreme Court dismissed Vodafone Idea’s plea for relief on its ₹703 billion AGR dues. This caused a 20% drop in Vodafone Idea’s stock price, as the market had factored in a potential 50% reduction in these dues. However, Nuvama said they hadn’t expected any such relief, so the court’s decision wasn’t a surprise.

The brokerage highlighted that Vodafone Idea’s future success largely depends on government support. By FY26, the company is expected to generate ₹224 billion in EBITDA, part of which will go towards paying off government dues.

Vodafone Idea may also convert ₹120 billion of its dues into equity, helping manage the remaining payments. By FY27, EBITDA is projected to rise to ₹261 billion, with additional debt converted into equity and the rest paid through earnings.

Debt to Equity Conversion

Though who all are willing to convert their Debt into equity would be the bigger question. Vodafone idea is planning to raise funds of around 49000 crore but with the share price fall, raising funds would be very costly.

Kumar Manglama Intervened to stabilize the stock and bought 1.86 crore stocks himself and around 80 lakh shares through his company.

Has the Worst Passed for Vodafone Idea Share?

Though the Agr Dues case has passed and the market has digested its impact As I said there remain few issues that need to be resolved and challenges that need to be tackled.

Nuvama believes that with the AGR issue behind them, Vodafone Idea has a clearer path forward. Despite its significant debt, the company could repair its business and benefit from the Indian telecom industry’s strong outlook, driven by tariff hikes and 5G expansion.

Nuvama expects Vodafone Idea’s EBITDA to grow at a compound annual growth rate (CAGR) of 15% between FY24 and FY27, supported by a 12% increase in average revenue per user (ARPU) and slowing subscriber loss.

I think SC agr dues case was just the beginning of their problems though from promoter to GOI everyone’s trying to establish the company but huge debt and losing customer base remains an issue. The company needs urgent funds to solve some of its current problems. let’s see when and If it gets its required funding.

Read Also :Vodafone Idea Share Target 2024, 2025, 2030, 2040, 2050

Vodafone Idea Share Price Target By Nuvama and Citi

Nuvama advises investors to consider buying Vodafone Idea shares due to the current dip, predicting a target price of ₹15 using an EV/EBITDA valuation method. This suggests over a 40% upside from the current market price of ₹10.52.

Citi also gives a Target Price of Rs 22 and they see a huge upside in Vodafone’s Idea in coming years.

In summary, Nuvama and Citit and 7 other global and regional Brokerage firms see a good positive side recovery in Vodafone idea from the current level. This is the level at which the company had issued their FPO so Rs. 11 is a very crucial support level for Vodafone idea share.

Conclusion

Everything that Nuvama Said looks very positive but is it.? SC AGR Setback might not be that big of an event but High debt and fundraising issues remain a big challenge for the company. Expansion, Launching 5G and even 4G in left-out areas, and to top it continued loss of market share is another challenge that the company needs to resolve as soon as possible.

It remains a very risky bet in the market. But You also can’t ignore that it is India’s second-largest listed telecom company. So, if someone’s willing to take risks, I would say don’t go more than 5% of your portfolio into this company.

It might turn out to be the best bet of your life and make you the next Jhunjhunwala but betting heavy on a downtrodden company might also make you bankrupt. Don’t rely only on gut feeling look at the numbers and then take calculated risk.

And at last, the last call to buy, sell, or hold a Vodafone idea share must be yours to decide cautiously after consulting your financial advisor.

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