Nuvama has retained a Hold call on Vodafone Idea, citing decent growth and stable margins in the September quarter. The company’s revenue rose 1.6% QoQ and 2.4% YoY to ₹11,190 crore, in line with Street estimates, while ARPU grew 1.2% QoQ and 7.1% YoY to ₹167. Vodafone Idea lost 1 million subscribers during the quarter, compared with 0.5 million in Q1FY26, but added 0.4 million 4G users, taking the total to 127.8 million.
Nuvama noted that subscriber losses have moderated in recent quarters as the company expanded its network and rolled out 5G services. In some mature markets, introductory 5G plans were revised from ₹299 to ₹349, aiding ARPU growth in the absence of tariff hikes. The EBITDA margin improved 10 bps QoQ to 41.9%, supported by lower administrative costs, while the adjusted loss narrowed to ₹5,560 crore (from ₹6,610 crore in Q1FY26), benefiting from lower finance expenses and forex gains.
On the balance sheet front, Nuvama flagged that Vodafone Idea’s leverage remains elevated amid limited debt funding visibility. Capex fell to ₹1,750 crore (from ₹2,440 crore in Q1FY26) due to cash constraints, and AGR dues stand around ₹78,500 crore. The management guided for FY26 capex of ₹7,500–8,000 crore, funded through internal accruals and existing cash flows. The brokerage highlighted that while conversion of the government’s stake and improved credit rating have supported talks for fresh funding, the debt raise remains delayed.
Nuvama added that the Supreme Court’s order for AGR dues reconciliation is a positive, but reiterated that timely balance sheet repair is critical for Vodafone Idea’s long-term viability. The brokerage maintained a Hold call, noting that while operational indicators are improving, funding clarity remains a key overhang.
Disclaimer: This article is for informational purposes only and does not constitute investment advice or stock recommendations.
