Vodafone Idea shares: Should you buy, sell or hold as losses widen in Q3?

,vodafone idea (VI) Delivered softer Q3FY23 results with modest APRU gains (INR135 vs INR131 in Q2FY23), and continued customer loss (6mn) and lower MOUs. Revenue and EBITDA were both flat QoQ. We remain cautious on the capital-growth and ARPU trajectory. VI also needs to make sure it doesn’t get too far behind its peers in the 5G rollout. We have included equity conversion by the Government of India in our estimates. We do not include AGR dues 699 billion in our price target calculation,” said Nuwama Research while retaining its ‘REDUCE/SU’ tag with the target price 7.

“It continues to lose customers (mainly in the 2G segment) and this adversely impacts revenue growth. Addition of 4G customers Remains silent. It needs capital inflows to scale up capital expenditure to match peers in terms of 4G coverage/capacity. It has still not announced any timeline regarding 5G implementation,” Yes Securities said in a note.

The brokerage house expects the EBITDA margin to improve in the near future due to lower SUC charges and some savings on rentals following the recent talks with Indus Towers. “We forecast a revenue CAGR of 12.3% over FY22-24E with an average EBITDA margin of 43.6%. We maintain our REDUCE rating on the stock with a target price of 7.5/share,” Yes Securities added.

“The much-needed capital raise is critical to provide immediate liquidity for network expansion. Despite the opportunity for higher operating leverage from any source of ARPU growth, the significant amount of cash needed to repay debt leaves limited upside opportunities for equity holders. The current low EBITDA will make it challenging to service debt without external funds. reiterates our neutral rating with a target price of 8,” said another brokerage Motilal Oswal.

The views and recommendations given above are those of individual analysts or broking companies and not of Mint.