Q3FY21 Result Update - Vodafone Idea - ICICI Direct

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).

Valuation & Outlook

VIL remains the weakest private telco. While AGR dues payment extension was a short-term breather, its survival hinges on quick capital infusion and tariff hike/floor tariff implementation. The need for capitalisation is of paramount importance mainly due to its lagging spends on network and relative market share loss. We maintain SELL with DCF based TP of Rs. 6. We will monitor triggers like fund raise, tariff hike, before changing our stance.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_VodafoneIdea_Q3FY21.pdf

Shares of Vodafone Idea Ltd was last trading in BSE at Rs.12.08 as compared to the previous close of Rs. 12.54. The total number of shares traded during the day was 68242129 in over 92448 trades.

The stock hit an intraday high of Rs. 12.9 and intraday low of 11.92. The net turnover during the day was Rs. 838161404.

Source : Equity Bulls

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