Vodafone Idea shares: Nomura India ups target price by 131%! Here's why

Nomura India has upped its target price on Vodafone Idea Ltd by 131 per cent or 2.3 times to Rs 15 per share from Rs 6.50 earlier, as it upgraded the stock to 'Neutral', saying Q4 results for VIL were in line with estimates, with the pace of subscriber loss moderating and average revenue per user (ARPU) seeing modest uptick.

Nomura India said a long journey remains to be traversed, but the tempest has largely passed and VIL is gearing up to meet clear skies ahead.

"We upgrade the stock to Neutral (from Reduce) with a revised target price of Rs 15 (from Rs 6.50); we roll forward our valuation to March 2026 with an EV/Ebitda multiple of 15 times. We note the outlook for the industry has improved considerably with all players aligned on the need for ARPU hikes and the industry setting into a 3-private player market," it said.

The brokerage has trimmed its FY25 Ebitda estimates by 2 per cent and raise FY26 Ebitda by 6 per cent, factoring in lower subscriber losses.

Nomura India said a change of fortunes is now on the cards, with VIL being able to complete its fund raise materially improving the outlook. The fund raise, the foreign brokerage said, will enable VIL to catch up with peers on network experience; commence 5G rollout; and compete effectively in the industry and curb its subscriber losses.

"We expect the industry to take a material tariff hike of 15% following the conclusion of the elections, which should be a key trigger for the stock," it said.

The broking firm expects the government to offer some form of relief to the company when payments in FY25 come up.