CLSA has maintained its outperform rating on Vodafone Idea, but cut the target price to ₹11 from ₹12, citing continued pressure from elevated subscriber losses despite improving revenue metrics.
The brokerage noted that Q3 revenue rose 1% quarter-on-quarter and 2% year-on-year to ₹113 billion, driven by a steady improvement in mobile ARPU, which increased 3% QoQ and 6% YoY. While ARPU trends remain encouraging, CLSA highlighted that mobile subscriber losses were higher than expected at 3.8 million, taking the total subscriber base down to 193 million, which continues to weigh on overall growth momentum.
Vodafone Idea’s capital expenditure stood at ₹64 billion in 9MFY26, up 21% YoY, underscoring the company’s focus on network investments. Meanwhile, Q3FY26 cash generation improved to ₹23.6 billion, up 5% QoQ, offering some comfort on near-term liquidity.
CLSA also drew attention to management commentary, where the CEO stated that the government’s AGR relief is definitive and long-term, with a reassessment of AGR liabilities already underway. The company is also engaged in discussions to secure debt funding for a planned US$5 billion investment programme over the next three years, which could support network expansion and stabilisation efforts.
Despite near-term challenges, CLSA believes clarity on AGR relief and successful fund-raising could materially improve Vodafone Idea’s medium-term outlook.
Disclaimer: The views and recommendations above are those of CLSA. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
