Vodafone Idea shares can rally as much as Rs 23 in bull case: Kotak Equities

May 16, 2024 | blog

While calling Vodafone Idea a high-risk, high-reward alternative, home brokerage Kotak Institutional Equities on Thursday maintained a promote name on the telecom operator however stated that within the bull case situation, it could rally as much as Rs 23.

“In our bull case, we assume a sharper 10% 10-year ARPU CAGR (versus our base case estimate of ~8.5%). In this case, our FV for Vi may probably enhance to Rs23/share. However, a number of issues (resembling AGR waiver, moderation in aggressive depth from friends and sharper tariff hikes) should fall in place for this end result,” stated Aditya Bansal of Kotak Equities.

Vodafone Idea shares have been buying and selling 1.5% increased right now at Rs 13.38 on BSE. The inventory is in focus right now because the debt-ridden telco, which lately concluded its Rs 18,000 crore FPO, is about to announce its March quarter outcomes later within the day.

In the bottom situation, assuming the established order (3+1 market assemble) to proceed past FY2026, with the federal government permitting some reliefs (deferral, waiver or conversion of spectrum and AGR dues) to make sure Vodafone’s survival, Kotak has a goal of Rs 10 on the inventory.

“Vi’s fund-raise ensures the continuation of 3+1 market construct in the medium term. With easy subscriber gains (from Vi) unlikely, we believe telcos’ focus could shift from land grab to generating adequate returns through tariff hikes,” Kotak stated, including that the long-term revival nonetheless hinges on the federal government’s reduction measures, moderation in aggressive depth and Vi’s execution to avert additional subscriber losses.”We await signs of Vi’s subscriber base stabilization and greater clarity on potential GoI relief measures/dilution, before turning more constructive,” the brokerage stated.In This autumn, Vi’s web loss is predicted to be within the vary of Rs 7,307.20 crore to Rs 7,680 crore whereas income for the quarter is predicted to be round Rs 10,690 crore.

(Disclaimer: Recommendations, recommendations, views and opinions given by the specialists are their very own. These don’t symbolize the views of Economic Times)

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