The brokerage has set a target price of Rs 9, implying a downside of around 24% from the previous closing price of Rs 11.85%. JPMorgan said the recent outperformance in the stock appears overdone and flagged that the company is still awaiting bank funding to kickstart the next phase of its capex cycle — a key step toward improving network quality, stemming subscriber losses, and eventually achieving positive net additions.
While the first capex cycle began in Q1FY25 following a Rs 18,000 crore fundraise via FPO and helped slow subscriber losses, the company has yet to achieve sustained net additions. JPMorgan also views Vodafone Idea’s target of a threefold increase in cash EBITDA over three years as aggressive, as it assumes market share gains against Bharti Airtel and Reliance Jio, which the brokerage finds uncertain.
It added that multiple hurdles remain before the business stabilises, including securing bank funding and achieving positive subscriber growth, while current valuations at around 15x FY27E EV/EBITDA appear to already factor in most positives.
“We believe the company is still in the early days of proving the success of its strategy, which will begin with a capex rollout and be followed by arresting subscriber losses before regaining market share. We await proof of success in arresting the sub losses and balance sheet exposures before turning more constructive,” the brokerage said in a note.
Vodafone Idea Q3 snapshot
The telecom operator reported a net loss of Rs 5,286 crore for Q3, narrowing from a loss of Rs 5,524 crore in the previous quarter. Revenue rose 1.1% QoQ to Rs 11,323 crore, while EBITDA increased 2.8% to Rs 4,817 crore. EBITDA margin expanded to 42.5% from 41.8% in Q2.
ARPU improved to Rs 186 in Q3FY26 from Rs 173 a year ago, registering a 7.3% YoY increase, mainly driven by customer upgrades. The total subscriber base stood at 19.29 crore, including 12.85 crore 4G and 5G users, up from 12.6 crore in the corresponding period last year.As of December 31, 2025, bank debt was at Rs 1,126 crore. During the quarter, the company raised Rs 3,300 crore through non-convertible debentures (NCDs), while cash and bank balances were at Rs 6,963 crore. Vodafone Idea said the NCD issuance was completed ahead of clarity on the AGR matter, reflecting lender confidence in its turnaround plans.
The company added that its AGR liability has been frozen at Rs 87,695 crore as of December 31, 2025, subject to reassessment. Annual payments of Rs 124 crore are scheduled between FY26 and FY31, followed by Rs 100 crore annually from FY32 to FY35, with the remaining balance to be paid in six equal installments between FY36 and FY41. The reassessment process for the AGR liability is currently underway.
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