Vodafone Idea has faced significant challenges in the stock market, with its share price declining nearly 5% over the past five days. The telecom giant has now missed a critical deadline to submit a bank guarantee amounting to Rs 6,091 crore. This guarantee is related to outstanding payments from the 2015 spectrum auction, raising concerns among investors.
Missed Deadlines and Financial Obligations
The Department of Telecommunications (DoT) has mandated that Vodafone Idea either secure a bank guarantee or make a cash payment of Rs 5,493 crore by March 10. This requirement comes on the heels of the DoT’s decision to provide a waiver of Rs 24,800 crore in bank guarantees for earlier spectrum auctions held in 2012, 2014, 2016, and 2021. However, this waiver does not cover the dues from the 2015 auction, a situation which the company had previously appealed to the DoT to reconsider.
Analyst Insights: Downgrades and Future Projections
In light of these developments, brokerage firm Motilal Oswal has reassessed Vodafone Idea’s stock, downgrading it from a ‘Neutral’ to a ‘Sell’ rating. The firm has set a new target price of Rs 5 and reduced its EBITDA estimates by 7%-8% for the fiscal years 2026-2027. According to their analysis, "Vodafone Idea has experienced a decline in market share during Q3 FY25, compounded by ongoing data subscriber losses and diminishing customer engagement."
Financial Performance in Q3 FY25
In its latest financial report, Vodafone Idea recorded a net loss of Rs 6,609.3 crore in Q3 FY25, a slight improvement from a loss of Rs 7,175.9 crore in the previous quarter. The company’s revenue from operations saw a modest increase of 1.7%, rising to Rs 11,117.3 crore from Rs 10,932.2 crore in Q2 FY25. Additionally, Average Revenue Per User (ARPU) has shown signs of recovery, climbing to Rs 173 in the third quarter, up from Rs 166 in the preceding quarter.
Conclusion
As Vodafone Idea navigates these financial hurdles, investors and stakeholders will be closely monitoring the company’s ability to meet its obligations and improve its market position. The upcoming deadlines and performance metrics will be crucial in determining the future trajectory of this telecom player in a competitive landscape.
