ICICI Direct has given Sell recommendation for Vodafone Idea with a target price of Rs. 6 in its research report issued on Feb 16, 2021

ICICI Direct’s research report on Vodafone Idea

In Q3FY21, Vodafone Idea’s (VIL) reported revenues were up 1% QoQ to Rs 10,894 crore, with ARPU growth of ~1.7% QoQ to Rs 121. The subscriber base declined by ~2 million to 269.8 mn, with churn rate reducing to 2.3%. Reported EBITDA margins were up 86 bps QoQ to 39.3%, on account of change in accounting of subscriber acquisition costs that aided reported EBITDA by ~Rs 330 crore. The EBITDA margin (ex-Ind-AS 116 impact), adjusted for one-offs was at 16.3% vs. 15.5% in Q2. The loss was at Rs 4532 crore, aided by lower depreciation costs and one-off exceptional items of Rs 1696 crore (benefits of Rs 2119 crore towards profit on sale of stake in Indus Tower partly offset by charge towards integration related costs, provision for additional depreciation and one-time spectrum charges).


We maintain SELL with DCF based TP of Rs 6. We will monitor triggers like fund raise, tariff hike, before changing our stance.