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Informist, Friday, Jan. 2, 2026

 

MUMBAI – Vodafone Idea Ltd. is expected to face some selling pressure as the relief granted to the company seems insufficient, given its low earnings before interest, taxes, depreciation and amortisation, which is not enough to meet its spectrum debt requirements and capital expenditure plans, analysts said. As soon as the relief was announced, the stock had fallen 15% and closed nearly 11% at INR 10.76 on Wednesday. However, the stock has risen around 10% since and on Friday closed at INR 11.78.

 

Emkay Global Financial Services maintained its 'sell' recommendation on the company's stock with a target price of INR 6, implying a 50% discount to its current market price. Axis Capital has maintained its 'reduce' recommendation on the stock with a target price of INR 9.45, according to a report from NDTV Profit. 

 

Rupak De, senior technical analyst at LKP Securities suggests holding Vodafone Idea's stock and selling it if it falls below INR 11.30. Telecom company Vodafone Idea received a relief package from the Union Cabinet over the company's adjusted gross revenue. The Union Cabinet has given an interest-free moratorium on its INR 877 billion AGR dues before 2017-18 (Apr-Mar) for a period of five years, which will be payable over FY32-FY41. The dues concerning the AGR for FY18 and FY19 will be payable over FY26 to FY31 without any change. However, the government did not provide any waiver, which was contrary to the Street's expectations of at least a 50% waiver, according to a report from Emkay Global Financial Services.

 

Given the company's capital expenditure plans of INR 75 billion to INR 80 billion for FY26 and its deferred payment obligations towards spectrum amounting to around INR 1.2 trillion, the company's leverage remains high, Emkay Global said. Vodafone Idea's EBITDA of INR 8.98 billion, 6.7% of its spectrum debt, along with a cash balance of INR 30.80 billion as of Sept. 30, is not enough to meet its debt and capital expenditure plans, according to the report.      

 

The relief package may have set the stage for the government to potentially exit Vodafone Idea, according to an article from the Indian Express. The possibility of bringing an investor from the private sector is also under active consideration, top government sources told the Indian Express.

 

The cabinet's decision to freeze the company's AGR dues for the next five years provides a clearer picture of its future liabilities, which was a precondition put forth by the private sector, the report said. The government, due to its concerns over the highly concentrated nature of the telecom industry, would like to have multiple players in the industry for which it sees the company as "a viable player". However, the company's risky financial situation has raised concerns about its survival in the competitive industry, the report said. 

 

Indian telecommunications operators net added 2.01 million subscribers in November, a 40% rise from the previous month. All players saw a net addition of subscribers for the month, barring Vodafone Idea. Reliance Ltd.'s Reliance Jio Infocomm Ltd. net added 1.39 million users in November. The company was followed by Bharti Airtel with net additions of around 1.22 million users in November, Vodafone Idea lost 1.01 million subscribers in November. However, this was lower than the 2.08 million users it lost in October; its overall subscriber count stood at 199.71 million.

 

The Reliance-owned telecom company raised its market share to 41.41%, up 5 basis points from October. Bharti Airtel's market share also rose 5 bps on month to 33.64% in November. Bharti Airtel is expected to face selling resistance at INR 2,140 and find support at INR 2,000 in the near-term.        

 

TOP HEADLINES

* RailTel Corp gets letter of award for INR 567 mln order in Assam
* GST officials confirm penalty of INR 6.38 bln against Vodafone Idea
* Data alert: Telecom operators add 2 mln mobile users in Nov, up 40% on month
* Vodafone Idea tweaks merger pact, to receive INR 58.4 bln from promoters
* ITI gets INR-727.6-mln order for ice-hockey rink project in Himachal Pradesh
* Bharti Airtel launches Cartoon Network Classics channel on Airtel Digital TV
* PRESS:Mgmt must define Vodafone Idea's corporate strategy - Telecom minister

 

Following are the resistance and support levels for key telecom stocks for next week as per calculations based on their prices on the National Stock Exchange:

 

Company	Price	Week-on-week  change in %	Resistance	Support
Bharti Airtel	2,106.30	0.00	2136.80	2082.80
Mahanagar Telephone Nigam	36.77	(-)0.90	37.20	36.10
Reliance Industries	1592.30	2.10	1604.80	1572.00
Tata Communications	1790.10	0.70	1839.40	1758.80
Tata Teleservices Maharashtra	49.79	(-)0.70	50.40	49.00
Vodafone Idea	11.78	(-)1.30	12.20	11.40
Nifty 50	26328.55	1.10	26483.90	26040.70
S&P BSE Sensex	85762.01	0.90	86290.60	84804.60

 

End

 

Reported by Akshat Saksena

Edited by Deepshikha Bhardwaj

 

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