Vodafone Idea Share Outlook : Today, Vodafone Idea shares have gained 14%. The stock strengthened and reached a price of Rs 11.94. Whereas on Friday it closed at Rs 10.47. Today the stock opened at Rs 11.27. Debt-ridden telecom company Vodafone Idea has given a contract of Rs 30,000 crore to Nokia, Ericsson and Samsung for the supply of 4G and 5G network equipment. After which the outlook of the stock has strengthened.
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what is the whole matter
Debt-laden telecom company Vodafone Idea has awarded a Rs 30,000 crore contract to Nokia, Ericsson and Samsung for the supply of 4G and 5G network equipment. This contract is for 3 years. The company had earlier announced capex of $6.6 billion or Rs 55,000 crore in three years. This deal is the first step in this direction. The capex program aims to increase the 4G population from 1.03 billion to 1.2 billion, launch 5G services in major markets and expand capacity in line with data growth.
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The Supreme Court gave a setback
Last week, the Supreme Court gave a shock to the company on the AGR issue. The Supreme Court has rejected the petition of telecom companies, in which a demand has been made to re-calculate the AGR. Actually, Vodafone Idea has been shocked the most by this decision of the Supreme Court because out of the total liability of Rs 92,000 crore, Vodafone-Idea has a liability of Rs 70,300 crore, which is 33 percent of its total debt.
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Buy rating on the stock
In its recent report, brokerage house Nomura India has given a Buy rating to Vodafone Idea and set the target price at Rs 15. The brokerage says that after the conclusion of the overhang, the bad is now behind Vodafone Idea, while the recent sharp decline in the stock is like an opportunity to buy the stock. The brokerage says that we have noted that the AGR results were a significant pressure on VIL, and after the conclusion of this overhang, there is now incremental visibility on the way forward for the company.
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Despite its large debt pressure (but manageable with government support) in the coming years, Nomura India said, the company will be able to steadily rebuild and repair its business and participate in the strong outlook for the Indian telecom industry. The outlook for the next 2 years is based on clarity on significant tariff hikes and 5G monetisation. Nomura India has maintained its forecasts, which are based on expectations of 12 per cent ARPU growth for VIL in FY25-26 and modest improvement in subscriber base loss in FY27.
Brokerage house Citi has also given a Buy rating on Vodafone Idea and has given a target price of Rs 17 on the stock. At the same time, Nuwama has given a Hold rating to Vodafone Idea and has given a target price of Rs 11.5.
(Disclaimer: The views or advice on the stock are given by the brokerage house. These are not the personal views of Financial Express. There are risks in the market, so take expert advice before investing.)
