Citi has issued a Buy call on Vodafone Idea, setting a target price of ₹22 per share following the Supreme Court’s agreement to hear the company’s curative petition regarding its Adjusted Gross Revenue (AGR) dues. Analysts view this development as a significant milestone, as the matter has been pending for a considerable time.
A favorable ruling from the Supreme Court could substantially alleviate Vodafone Idea’s AGR debt burden, with potential benefits estimated at ₹4-5 per share, translating to over a 25% increase on the current stock price. Notably, Citi’s base case target of ₹22 does not yet account for any reduction in the company’s AGR liabilities, indicating that the actual target could be higher if the court’s decision is favorable.
The implications of this development extend beyond Vodafone Idea, as it could also benefit Indus Towers, which has financial ties with the telecom company. Additionally, any relief granted to Vodafone Idea would have a limited but positive impact on Bharti Airtel as well.
As the market watches closely, the outcome of the Supreme Court hearing could be a pivotal moment for Vodafone Idea, potentially reshaping its financial landscape and investor sentiment.
