Shares of Vodafone Idea Ltd. surged up to 8% on Tuesday, November 11, following the company’s September quarter results, which showed a sequential improvement with losses narrowing, aided by a one-time reversal of interest expenses.
Revenue for Q2 grew 1.6% quarter-on-quarter (QoQ) to ₹11,200 crore, surpassing expectations of flat growth, while the EBITDA margin inched up slightly to 41.9% from 41.8% in the previous quarter. The net loss fell to ₹5,500 crore from ₹6,600 crore in Q1, better than analysts’ estimate of ₹6,800 crore, supported by reduced interest costs. Cash EBITDA (ex-IndAS) rose 3% QoQ to ₹2,250 crore, exceeding projections by 2.5%.
The subscriber base fell by 1 million, but average revenue per user (ARPU) increased to ₹180 from ₹165. Vodafone Idea’s gross debt, including accrued interest, stood at ₹2.03 lakh crore, primarily comprising deferred spectrum and AGR liabilities, while capex declined 28% QoQ due to delays in debt raising.
The Supreme Court’s recent flexibility on AGR dues could ease financial pressures. Citi maintains a ‘Buy’ rating with a ₹14 target, while UBS holds a ‘Neutral’ rating at ₹9.7. Management will discuss Q2 results in a 2:30 pm conference call.