Vodafone Idea Ltd (VIL) shares were in focus on Tuesday, ahead of the telecom operator's December quarter earnings. The telecom player is expected to report quarterly losses in excess of Rs 7,000 crore amid a 3-6 per cent year-on-year (YoY) rise in sales. All eyes would be on commentary on progress of 5G rollout, increase in network capacity and the arrest of subscriber fall.
Centrum Broking expects Vodafone Idea to report decline of 40 lakh subscribers sequentially to 20.1 crore subscribers, with growth in ARPU of 5 per cent QoQ to Rs 164 per month, driven by July 2024 tariff hike and ongoing migration of users from 2G to 4G technology. The management commentary on ongoing capex activity would be key to watch out for.
This brokerage sees Vodafone Idea to report a loss of Rs 7,128 crore. It sees revenue rising 5 per cent YoY to Rs 11,206 crore. Nuvama estimated the adjusted loss at Rs 8,187 crore. This brokerage sees revenue rising 3.9 per cent YoY at Rs 11,088 crore.
"We estimate revenue growth of 1.4 per cent QoQ, driven by residual impact of tariff hike. Ebitda margins shall expand 30bp QoQ. Plans to increase network capacity, progress on 5G rollout and arrest subscriber decrease are key monitorables," it said.
MOFSL said with Vodafone Idea's large capex plans, the pace of market share gain may slow down, but RJio (and Bharti) are still likely to continue gaining market share at Vodafone Idea's expense. This brokerage anticipated Vodafone Idea's Q3 loss at Rs 7,053 crore. It sees sales for telecom operator rising 5.7 per cent to Rs 11,283 crore.
Ahead of its quarterly earnings, shares of Vodafone Idea were trading 0.66 per cent lower at Rs 9.06 on BSE. The stock is up 16 per cent in the past three months. There are hopes of waiver of AGR dues. Analysts noted that while the government intends to ensure a ‘3+1’ player market, Telecom Act, 2023 does not explicitly empower the government to waive off the telcos’ dues. Hence, unless it amends the Telecom Act or comes out with any other legislative or executive measures, the government cannot waive off the AGR liability decided by the SC.
"Therefore, telcos were pleading with the SC for AGR relief since the last 4 years despite the government agreeing that the SC’s AGR decision is detrimental to its objective of having three healthy private telcos. Hence we believe the government might mostly agree to extend this 4-year moratorium (which ends in Sep'25) on payment of AGR/spectrum dues (but it has to be NPV neutral) or convert dues into equity," JM Financial said last month.