UBS has maintained its neutral call on Vodafone Idea with a target price of ₹8.5 after the telecom operator posted a first-quarter performance broadly in line with expectations but continued to report heavy losses. Revenue was flat sequentially and in line with estimates, with average revenue per user (ARPU) rising 0.6% quarter-on-quarter to ₹165.
EBITDA declined 1% sequentially, with margins slipping 47 basis points to 41.8%. Net loss widened to ₹6,610 crore, higher than estimates, largely due to higher-than-expected interest charges. Capital expenditure stood at ₹2,440 crore in Q1 FY26, lower than the ₹3,210 crore in the third quarter of FY25 and ₹4,230 crore in the fourth quarter, reflecting a slower pace of network investments.
UBS said while operational metrics were stable, the elevated interest burden and weak balance sheet continue to weigh heavily on Vodafone Idea’s prospects. The brokerage remains cautious given the company’s significant debt load and funding requirements, despite steady ARPU improvement and modest capex rationalisation.
Disclaimer: The views and recommendations made in this article are those of UBS. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.
