Vodafone Idea Q4 Preview: Co likely to remain in red on subscriber losses, muted revenue

Continued losses in subscribers, negative operating leverage, and muted growth in revenue is likely to keep Vodafone Idea in the red during the March quarter.

The telecom operator is expected to post a consolidated net loss of Rs 7,524 crore, according to the average of estimates given by 4 brokerages. This would be higher than the loss of Rs 6,563 crore posted a year ago. On a sequential basis, however, the losses are seen narrowing. The company will release its quarterly numbers on Thursday. Consolidated revenue for the quarter is seen rising 3% on year to Rs 10,543 crore, but falling by around 1% sequentially.

Besides earnings, the key monitorables for Dalal Street investors would be any progress around fundraising, 5G network services launch, capex plans, and trajectory for tariffs.

Here’s summarising analysts’ expectations from Vodafone Idea:

Emkay Global Financial Services
Firm expects subscriber losses to continue, albeit with some moderation. With the figure at 4.5 million versus 5.8 million, removal of the Rs 99 plan by Airtel in all circles may have helped VI’s case.

ARPU is set to increase by 1.2% QoQ to Rs 137, on change in mix, led by addition of 1.3 million data subscribers (1.8 million 4G subscriber additions). Overall, revenue is likely to decline by 0.9% QoQ. Margins are also likely to decline, by 24 bps QoQ.

ICICIdirect
Brokerage is building in monthly ARPU growth of 1% QoQ at Rs 136. Expect churn for Vodafone Idea to remain elevated, with 4 million customer exits likely in Q4. Expect overall revenue to be down 1% QoQ at Rs 10,519 crore. EBITDA at Rs 4,072 crore is expected to be down 2.6% QoQ, owing to negative operating leverage. Reported margins are expected at 38.7%, down 70 bps QoQ. The company is expected to post a net loss of Rs 7,960 crore.

ICICI Securities
Vodafone’s EBITDA may slide 2.5% QoQ to Rs 41 billion. Expect revenue to shrink 1% QoQ to Rs 105 billion due to subscriber losses while ARPU may grow on rise in penetration of unlimited plans. Expect EBITDA to decline 2.5% QoQ and net loss to be at Rs 80 billion (nil tax rebate).

JM Financial
Subscriber losses are likely to continue; however, ARPU seen rising 2.5% QoQ to Rs 138. Expect 1.5 million addition to MBB subscriber base (TRAI’s Jan'23 subscriber data showed ~1.1 million addition in MBB subscribers).
Expect revenue to remain flat QoQ at Rs 106 billion. EBITDA is likely to grow 1.4% QoQ to Rs 42 billion

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)