Vodafone Idea hits 52-week high; stock zooms 69% in three months

ICICI Securities expects Vodafone Idea to post a net loss of Rs 6,655 crore for the October-December 2020 quarter
Shares of Vodafone Idea hit a 52-week high of Rs 13.53, up 10 per cent, on the BSE in Friday's intra-day trade on the back of heavy volumes in an otherwise weak market. The telecom services provider's stock surpassed its previous high of Rs 13, touched on September 4, 2020.

At 11:07 am, the stock was trading 7 per cent higher at Rs 13.13 on the BSE against a 0.7 per cent decline in the S&P BSE Sensex. A combined 733 million equity shares changed hands on the counter on the NSE and BSE, the exchange data shows.

In the past three months, Vodafone Idea's stock has zoomed 69 per cent as compared to a 24 per cent rise in the benchmark index. Its peer Bharti Airtel has rallied 50 per cent, while Reliance Industries was down 11 per cent during the same period.

According to Business Standard report, Vodafone Idea has, in its petition, brought to the notice of the Supreme Court some matters of dispute as regards its payment of adjusted gross revenue (AGR) dues.

It has said the payments it has made have not been accounted for by the Department of Telecommunications (DoT). Also there has been double counting of some revenue items in the AGR demand and deduction has not been made by the department on account of roaming charges paid by the operator, the report suggested. CLICK HERE TO READ FULL REPORT

Meanwhile, ICICI Securities expects Vodafone Idea to post a net loss of Rs 6,655 crore for the October-December 2020 quarter (Q3FY21). "We expect Ebitda (earnings before interest, taxes, depreciation, and amortization) margins at 36.8 per cent, down 170 basis points (bps) quarter on quarter (QoQ) as July-September quarter (Q2FY21) had one-off costs benefits of Rs 300 crore," the brokerage firm said in telecom sector update.

Analysts expect churn for Vodafone Idea to go down, driven by completion of network integration. We consequently bake in around 4 million customer exits on a QoQ basis, much lower than average churn of around 10 million seen in last four quarters, the brokerage said.

“We build in average revenue per user (ARPU) growth of 3 per cent QoQ at Rs 123, aided by higher data based usage upgrades. We expect overall revenues to grow 0.6 per cent QoQ at Rs 10,861 crore. The key monitorable will be fund raising plans and ARPU trajectory commentary ahead,” the brokerage firm added.

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