Vodafone Idea Ltd (VIL) shares continued their climb for the fourth consecutive session in Friday's trade. The stock moved up 3.58 per cent to hit a high of Rs 9.25. At this price, it has gained 19.50 per cent in four days.
Despite the mentioned uptick, analysts raised concerns over the telecom operator's expected dip in subscriber base. "VIL to report a decline of 40 lakh subscribers, sequentially, to 20.1 crore subscribers in the December quarter, with growth in ARPU growth of 5 per cent, quarter-on-quarter (QoQ), to Rs 164 per month. The management commentary on ongoing capex activity would be a key to watch out for going ahead," said analysts at Centrum Broking.
"We are cautiously optimistic on VIL shares for a medium- to short-term perspective. The recent capital infusion and network strengthening would be medium-term positive. But, the company is still struggling with its subscriber base. We need to look carefully at the ARPU (average revenue per user) numbers. So, investors with a high-risk appetite should hold the stock," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.
"If promoters infuse more equity or the company gets any significant write-offs in liabilities, its prospects would further improve. In case, VIL continues to lose customers in a big then it would be a cause of concern," said G Chokkalingam, Founder and MD of market research firm Equinomics Research.
Technically, near-term support on the counter could be seen in the Rs 8.50-8.40 range. That said, resistance may be found in the Rs 9.50-10.80 zone.
"Vodafone Idea has witnessed a consolidation breakout. The counter seems to have a support base around Rs 8.50. For now, the subsequent potential resilience is seen around the Rs 9.50-10.80 subzone, while the mentioned support base is likely to cushion any shortcomings," said Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.
"The stock has shown signs of some relief following a significant correction. It is signalling a potential trend reversal, backed by relatively higher volume and momentum. We foresee a short-term opportunity with a target price of Rs 9.85 on the upside, maintaining a stop loss of Rs 8.40," said Kushal Gandhi, Technical Analyst at StoxBox.
VIL is currently involved in the process of rolling out its 5G services in select areas. The company was formed in 2018 when Vodafone Group Plc merged its India business with Idea Cellular.
Recently, UK-based Vodafone Group said it sold the remaining 3 per cent stake in domestic telecom infrastructure firm Indus Towers for Rs 2,800 crore.
As of December 2024, promoters held a 38.80 per cent stake in the telco.