Vodafone Idea shares fell more than 3% after JPMorgan downgraded the stock to “Underweight” and reduced its target price to ₹9. The brokerage said the recent outperformance in the stock may be ahead of fundamentals. As of 9:30 AM, the shares were trading 3.54% lower at Rs 11.43.
JPMorgan stated that Vodafone Idea is still awaiting bank funding to drive the next phase of its capital expenditure cycle. The brokerage said this funding is important for the company to arrest subscriber losses and move toward net subscriber additions through improved network investments. The first capex cycle began in Q1FY25 following the ₹180 billion fund raise via FPO. While subscriber losses moderated, the company did not report positive net additions.
The brokerage also flagged Vodafone Idea’s target of a threefold increase in cash EBITDA over three years as aggressive, noting that it assumes market share gains from larger rivals. JPMorgan expressed scepticism about this assumption given the competitive environment.
At 15x FY27E EV/EBITDA, JPMorgan said the stock is pricing in most positives, limiting further upside. The brokerage added that Vodafone Idea faces multiple hurdles before business stabilisation, including securing bank funding and achieving sustained positive subscriber additions.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.