Vodafone Idea shares drop 2% ahead of Q2 results; here's earnings preview

Vodafone Idea Ltd shares fell over 2 per cent in Wednesday's trade ahead of its September quarter results. Analysts are largely expecting sales for Vodafone Idea's sales to grow 5-10 per cent year-on-year (YoY) and see its losses in the Rs 6,400-6,700 crore range for the quarter.

Nuvama Institutional Equities sees adjusted losses at Rs 6,394 crore in Q2 against a loss of Rs 6,432 crore in the June quarter and Rs 8,738 crore in the year-ago quarter. Revenue is seen rising 9.6 per cent YoY to Rs 11,518 crore from Rs 10,716 crore YoY. "Vodafone Idea revenue is likely to grow 9.6 per cent sequentially, backed by tariff hikes, whereas subscriber loss would persist. Ebitda margins may expand 430 bps QoQ," it said.

Shares of Vodafone Idea declined 2.47 per cent to hit a low of Rs 7.48 on BSE, taking their one-month fall to 17 per cent.  The stock has lost 56 per cent of its market value in 2024 so far. 

Kotak Institutional Equities said Vodafone Idea may report a net loss of Rs 6,741 crore. Revenue is seen rising 5.1 per cent to Rs 11,266 crore compared with Rs 10,716.30 crore YoY. 

"We expect revenue growth of 7 per cent QoQ on ARPU uptick led by tariff hikes, partially offset by continued subs decline. Reported Ebitda is likely to increase 10-11 per cent QoQ on higher ARPUs. We model EoP subscriber base to decline by 2 million QoQ (versus -2.5 million QoQ) to 208.1 million and ARPU to increase 9 per cent QoQ to Rs 159 per month on tariff hikes and continuing subscriber mix improvements," Kotak said. The brokerage has a 'Sell' rating on Vodafone Idea and a target price of Rs 10 on the stock.

JM Financial anticipated Vodafone Idea's Q2 loss at Rs 6,421 crore. It sees revenue rising 5 per cent YoY to Rs 11,257 crore.

MOFSL is 'Neutral' on Vodafone Idea and suggested a target price of Rs 10. It expects 5 per cent QoQ revenue growth, as the tariff hike benefit could be partly offset by continued subscriber declines. The brokerage expects reported Ebitda to grow 5 per cent QoQ with Ebitda margin expanding 30 bps QoQ to 40.3 per cent.

"ARPU is likely to improve 7 per cent QoQ to Rs 156, while the subscriber base is expected to further decline by 40 lakh. Expect 4G/5G network rollout to start in 2HFY25," it said.