The stock is now well above its 50-day SMA of Rs 11 and 200-day SMA of Rs 8.6, reflecting a sharp improvement in price momentum. That said, volatility remains elevated, with a one-year beta of 1.5, indicating sharper swings than the broader market, according to Trendlyne data.
Notwithstanding the stock’s fortunes reviving, market experts remain cautious.
In its latest note, Emkay Research upgraded the stock to ‘Add’ from an earlier ‘Sell’ call, setting the target price at Rs 12. Emkay believes the government moratorium for VI’s AGR liabilities with minimal annual payments until FY35 is a major boost, providing significant cash flow relief and a turnaround opportunity to the company.
“The relief reduces the net present value (NPV) of the burden by 60–80%, easing immediate survival pressure, along with the possibility of further reduction on reassessment of AGR dues. This will enable VI to access bank funding for 4G/5G expansion, helping the company arrest subscriber churn and market-share loss,” the brokerage note said.
Kranthi Bathini, Director-Equity Strategy at WealthMills Securities, said the promoter’s stake hike is reassuring for the investors after the AGR boost. Sounding a note of caution, Bathini said that the company is still not out of the woods and its fundamentals remain a worry. The ebbing in its subscriber base remains a key challenge, he added.
Emkay shares this sentiment, finding VI’s inability to increase subscriber market share and also upgrade the subscriber base from 2G to 4G/5G, as a big put-off.Its inability to significantly increase ARPU (Average Revenue Per User) through tariff repair is another major headwind, Emkay and Bathini added.
Both parameters will impact the company’s operational performance and debt servicing.
The company’s gross debt declined 8% YoY in Q3FY26 to about Rs 2.1 lakh crore, excluding lease liabilities, with spectrum-related dues accounting for a sizeable share.
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What unleashed the bulls?
1) AGR relief
The real kick for the telecom company was the relief on adjusted gross revenue (AGR) dues granted by the government. The move announced in December unleashed the bulls helping the stock hit its 52-week high of Rs 12.80 on the NSE. The stock is currently consolidating at the Rs 10-12 level.
Vodafone Idea’s 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 balance payable in six equal instalments between FY36 and FY41. The reassessment process is currently underway.
2) Promoter ups exposure
Birla has stepped up his exposure to the telecom operator through open market purchases, acquiring 4.09 crore shares of Vodafone Idea between January 30 and February 1.
As of December 2025, Birla held nearly 1.94 crore shares, or roughly 0.02% stake, while the broader promoter group owned 25.5% of Vodafone Idea.
3) Earnings
Vodafone’s losses have declined over the past three quarters. For the December quarter, the company reported a net loss of Rs 5,286 crore, versus a Rs 5,524 crore loss in the preceding quarter. Revenue rose 1.1% QoQ to Rs 11,323 crore, while EBITDA increased 2.8% to Rs 4,817 crore. EBITDA margin improved sequentially to 42.5% from 41.8%.
Average revenue per user (ARPU) climbed to Rs 186, up 7.3% year-on-year, supported by customer upgrades. The company’s subscriber base stood at 19.29 crore, including 12.85 crore 4G and 5G users, compared with 12.6 crore a year earlier.
The company’s overall subscriber base fell to 19.29 crore in Q3FY26 versus 19.98 crore in Q3FY25.
4) Turnaround plan
Management has laid out an aggressive three-year roadmap, aiming to triple cash EBITDA and deliver double-digit revenue growth over FY26–29. Central to this plan is a Rs 45,000 crore capex programme, with a large part of the investment slated for the next 12–18 months. The focus will be on rapid network expansion, aggressive marketing and achieving 4G parity with peers in 17 priority circles, alongside customer upgrades and premiumisation.
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Calling for caution
Emkay’s rating upgrade comes on an improved outlook. It said that the current tailwinds must be backed by deft execution to gain subscriber market share and migrate the subscriber base from 2G to 4G/5G.
Citi, which remains optimistic on Vodafone’s prospects, has maintained a Buy/High Risk rating with a Rs 14 target. It cautioned investors about the imminent need for refinancing, equity infusion or conversion of dues to meet higher spectrum payments after two years.
Bank of America Securities stays cautious with an ‘Underperform’ rating, citing vulnerability to subscriber and revenue share losses, limited visibility on further tariff hikes, and the overhang of long-term AGR liabilities.
ICICI Securities maintained a ‘Hold’ rating with a Rs 10 target, trimming EBITDA estimates but factoring in a higher valuation multiple and adjustments to AGR dues.
Bathini of WealthMills recommends the stock to investors with a high risk appetite, while those who already have the exposure to the scrip, can continue holding it.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)