Noida, May 18 (APAC Media): Shares of Vodafone Idea fell nearly 3% on Monday after investors remained cautious over the telecom operator’s muted revenue growth in the March quarter despite a sharp jump in reported profit driven by a one-time accounting gain.
The stock fell to an intraday low of around Rs 12.67 on the NSE as investors focused on the company’s weak operational momentum despite an improvement in profitability.
Market participants remained cautious over the telecom operator’s ability to accelerate subscriber growth and strengthen its balance sheet amid intense competition in the sector.
Vodafone Idea reported a consolidated net profit of Rs 51,970 crore for the March quarter, compared with a loss in the year-ago period.
The profit surge was largely attributed to a reassessment of AGR liabilities and recognition of gains arising from the present value adjustment of statutory dues payable to the government.
Revenue from operations rose about 3% year-on-year to Rs 11,332 crore during the quarter, while sequential growth remained largely flat.
Analysts said that a sustained recovery will depend on stronger cash flows and improved subscriber retention, which remain key to the telecom operator’s long-term turnaround.
The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) rose nearly 5% year-on-year to around Rs 4,890 crore.
Average revenue per user (ARPU), a key performance metric for telecom operators, improved to Rs 190 from Rs 175 a year earlier, supported by tariff revisions and a better subscriber mix.
Vodafone Idea also reported growth in its 4G and 5G user base and said subscriber additions turned positive from February this year.
The company has been expanding network investments and pursuing fresh fundraising initiatives to improve service quality and compete more effectively with larger rivals.
Brokerages noted that persistent worries around the company’s high debt burden, funding needs, and erosion in market share continue to pressure investor sentiment.
Vodafone Fundraising Plan
Vodafone Idea plans to raise Rs 4,730 crore from a Singapore-based entity of the Aditya Birla Group, according to a company filing disclosed on Saturday.
The telecom operator’s board has approved fundraising through the issuance of warrants that can be converted into equity shares at a later date.
As per the filing, the board has cleared the issuance of up to 430 crore warrants, each convertible into one equity share, to Suryaja Investments Pte. Ltd., Singapore, a promoter group company of the Aditya Birla Group.
The warrants will be issued at a price of Rs 11 per unit, taking the total fund infusion to Rs 4,730 crore on a preferential basis, the company said.
The proposed capital raise is part of the company’s broader efforts to strengthen its balance sheet and meet funding requirements amid ongoing financial and operational pressures in the highly competitive telecom sector.
Disclaimer: Views expressed are those of experts and do not reflect APAC Media. This is for informational purposes only, not financial advice. We are not responsible for investment decisions. Please consult a qualified financial advisor before investing.
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