Vodafone Idea (Vi) reported a subdued performance in Q3FY25, with revenue missing estimates and EBITDA coming in line with expectations, according to CLSA, which has maintained an ‘Underperform’ rating on the stock with a target price of ₹6 per share.
The company saw a 4% QoQ rise in ARPU (Average Revenue Per User) to ₹163, primarily driven by tariff hikes. However, Vi continues to lag behind Bharti Airtel by 25% in ARPU, highlighting its challenges in improving monetization and user retention.
Subscriber loss remains a significant concern for Vodafone Idea, as the company lost 5 million users QoQ and 15.4 million YoY, bringing its total subscriber base to 200 million. Given the higher-than-expected subscriber churn, CLSA has cut its revenue and EBITDA estimates for FY25-27 by 2-5%.
Additionally, the company’s awaited debt fundraising remains a key overhang. Investors are looking for clarity on Vi’s capital-raising plans, which are crucial for network expansion and improving its competitive position against stronger rivals like Reliance Jio and Bharti Airtel. Until there is clear visibility on funding and business turnaround, CLSA remains cautious on Vodafone Idea’s prospects.
