Vodafone Idea shares dropped by 4% today, falling below the ₹10 mark, following a wave of mixed brokerage reports that highlighted the company’s ongoing financial challenges. The stock faced pressure as analysts presented varied outlooks on the company’s future amidst concerns over its Adjusted Gross Revenue (AGR) dues and overall debt burden.
Brokerage Reactions:
- Goldman Sachs maintained a sell call on Vodafone Idea, setting a target of ₹2.5 per share, citing the high risk posed by AGR liabilities and an uncertain path forward for the company. The report indicated Vodafone Idea’s Free Cash Flow (FCF) could remain negative until at least FY31 without government relief, further straining the company’s finances.
- CLSA echoed concerns, retaining an underperform rating and factoring the AGR risk at ₹7 per share, which constitutes 40% of the stock’s fair value. The brokerage also pointed to Vodafone Idea’s substantial debt, including ₹70,300 crore for AGR dues and ₹1.39 lakh crore for spectrum obligations, which could lead to a financial crisis in H2FY26/FY27.
- On a more positive note, UBS maintained its buy call on the stock, suggesting a fair value of ₹12 per share. UBS acknowledged the AGR setback but did not rule out the possibility of equity conversion or deferral measures by the government, which could provide some relief. However, the firm expressed caution over whether these steps would be Net Present Value (NPV) positive for shareholders.
The mixed outlook from brokerages has put downward pressure on Vodafone Idea’s shares, as investors weigh the potential for government intervention against the company’s mounting liabilities. The stock’s dip below ₹10 highlights ongoing market concerns over its financial stability and future viability.
