Vodafone Idea Outlook : The stock of Vodafone Idea, a telecom company with a subscriber base of around 20 crores in the country, weakened today and fell below Rs 10. The stock has fallen by about 20 percent in 2 days. This year it has fallen by 39 percent. At present, the recent decline has come after the Supreme Court’s decision on the AGR case, in which the Supreme Court has rejected the petition of telecom companies, in which a demand has been made to recalculate AGR. After this development, some people believe that unless some big miracle happens, the company is on the path of bankruptcy. At the same time, some brokerage houses have advised buying the stock and have increased the target price.
Tata Motors: Tata Motors stock gets ‘Buy’ rating, investment opportunity after 16% fall from record high
In fact, Vodafone Idea has been the biggest shocked 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.
Buy rating on the stock
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.
IPO Year: IPOs are becoming a lottery, 7 stocks debuting this year have given more than 100% return, how will you make profit
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.
Bajaj Housing Finance: Stock will become 3 times the IPO price! Buy rating received after bumper listing, 10% upper circuit today
Risk of bankruptcy
In an X post, Deepak Shenoy, CEO and Portfolio Manager, CapitalMind, said that Vodafone Idea is on the path to bankruptcy in the coming days. The company’s outlook is deteriorating due to high debt and not generating sufficient cash flow. Vodafone Idea’s situation has worsened among other telecom companies after the Supreme Court’s decision on the AGR case. The telecom operator has a serious cash flow crisis going forward, with a payment of Rs 30,000 crore due between October 2025 and March 2026, followed by annual payments of Rs 43,000 crore over the next five years. He said, unless Vodafone Idea does a miracle, it is unlikely to survive in the coming days.
However, he has also given a disclaimer in his post, stating that he has investments in rival companies of Vodafone Idea.
(Disclaimer: The views or advice on the stock are given by the brokerage house or experts. These are not the personal views of Financial Express. There are risks in the market, so take expert advice before investing.)
