More Stories

Informist, Wednesday, Sept. 9, 2026

 

MUMBAI – Global brokerage Jefferies has started coverage on Vodafone Idea Ltd. with a "buy" recommendation and a price target of INR 20, implying an upside of 29% from the stock's current market price. The brokerage expects Vodafone Idea's revenue to rise at a compounded annual growth rate of 11% from the financial year 2025–26 (Apr-Mar) to FY29 as the number of subscribers stabilises. It said Vodafone Idea is a high-beta turnaround story, supported by accelerating revenue growth, operating leverage, and tariff-led earnings expansion. High-beta stocks are more volatile than market indices.

 

The debt-ridden company's cash earnings before interest, tax, depreciation, and amortisation could grow at a compounded annual growth rate of 25% over FY26-FY31, Jefferies said in a research report. Over FY26–FY29, Jefferies expects Vodafone Idea's cash EBITDA margin to expand by 840 basis points to 29%, primarily due to operating leverage. Vodafone Idea will be the biggest beneficiary of tariff hikes, with every 10% increase in tariffs driving around 34% rise in equity value, it said. The broking firm expects tariff hikes to support the company's profitability margin and also push its return on invested capital to double digits by FY32 from the current negative level.

 

Jefferies expects Vodafone's network investments to reduce churn and support gross subscriber additions, which is likely to lead to a turnaround in subscriber additions from FY28. However, the telecommunications company is likely to see a sharp rise in cash outflows of more than INR 400 billion annually during FY29-FY34, which will create a cash flow mismatch during this period. While the company's planned INR 250 billion debt raise is expected to be sufficient to tide over FY27–FY29, the brokerage said Vodafone Idea will require a fresh equity infusion of INR 160 billion in FY30. 

 

The equity infusion will also lead to the conversion of spectrum liabilities worth INR 153 billion into equity by the government, Jefferies said. "Given that Vodafone Idea has raised equity of INR 447 billion since 2019, we believe raising another INR 160 billion equity amid improving operating cash flows and continued government support may not be difficult," the brokerage said.

 

It sees scope for premiumisation for the company, given its lower share of data subscribers. The broking firm's estimates imply incremental EBITDA margins of around 50% over FY26-FY29, below the 60%-plus margin projection for the telecommunications sector as a whole, owing to higher network rollouts by Vodafone Idea during the period. Jefferies expects the incremental EBITDA margins to rise above 60% from FY30 as Vodafone Idea's network stabilises.

 

For the June quarter, Vodafone Idea had reported a consolidated net loss of INR 37.54 billion on revenues of INR 116.89 billion. Wednesday, its shares ended at INR 15.52 apiece on the National Stock Exchange, up 0.7% from Tuesday.  End

 

Reported by Eshitva Prakash

Edited by Rajeev Pai

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.